Click Here For Best Books On Taxation & Law. Upto 60% Off On Select Titles. Free Shipping & Pay On Delivery!
 

Click Here To Subscribe To Our Free Newsletter

Home › All Judgements › Haryana State Road & Bridges Development Corporation Ltd vs. CIT (P&H High Court)

Haryana State Road & Bridges Development Corporation Ltd vs. CIT (P&H High Court)

Posted on by editor — No Comments ↓
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: September 29, 2016 (Date of pronouncement)
DATE: October 8, 2016 (Date of publication)
AY: 2010-11
FILE: Click here to download the file in pdf format
CITATION:
S. 37(1): While expenditure for purchase of a capital asset is capital expenditure, guarantee commission to acquire the asset on installment terms is revenue expenditure

Expenditure incurred for the purchase of the machinery was undoutedly capital expenditure; for it brought in an asset of enduring advantage. But the guarantee commission stands on a different footing. By itself, it does not bring into existence any asset of an enduring nature; nor did it bring in any other advantage of an enduring benefit. The acquisition of the machinery on installment terms was only a business exigency. If interest paid on a credit purchase of machinery could be held to be revenue expenditure, we fail to see how guarantee commission paid to a bank for obtaining easy terms for acquisition of the machinery could be regarded as capital payments (Sivakami Mills Ltd. Vs Commissioner of Income Tax, [1979] 120 ITR 211 approved in Commissioner of Income Tax Vs Sivakami Mills Ltd. [1997] 227 ITR 465 followed. Chhabirani Agro Industrial Enterprises Ltd. Vs Commissioner of Income Tax [1991] 191 ITR 226 is not good law)

Related Posts:

  • Kerala State Co-op Agricultural And Rural Development Bank Ltd vs. ITO (Kerala High Court) I reckon the petitioner has exercised on time its statutory remedy of filing an appeal. It appears that it has also filed a stay petition. Procedural fairness demands that the authorities may wait, before taking further steps, until the appellate authority decides on the stay petition
  • National Co-operative Development Corporation vs. CIT (Supreme Court) In the case of a business, the profits must be arrived at on ordinary commercial principles. The scheme of the IT Act requires the determination of ‘real income’ on the basis of ordinary commercial principles of accountancy. To determine the ‘real income’, permissible expenses are required to be set off.…
  • Chheda Housing Development Corporation vs. ACIT (ITAT Mumbai) Despite the definition of the expression capital asset in the widest possible terms in section 2(14), a right to a capital asset must fall within the expression ‘property of any kind’ and must not fall within the exceptions. Section 6 of the Transfer of Property Act which uses the expression…
  • CIT vs. Alpha G. Corp Development Ltd (Delhi High Court) It is apparent from a reading of the facts in the appeal that the CIT(A) formed an opinion based upon diverse reasoning, having regard to the facts of each case, regarding the nature of expenditure and especially whether it was a one-time investment opportunity availed of by the assessee. This…
  • PCIT vs. State Bank Of India (Bombay High Court) The very purpose of insertion of sub-section (9) of section 40A thus was to restrict the claim of expenditure by the employers towards contribution to funds, trust, association of persons etc. which was wholly discretionary and did not impose any restriction or condition for expanding such funds which had possibility…
  • K. M. Refineries and Infraspace Pvt. Ltd vs. State of Maharashtra (Bombay High Court) Two propositions of law emerge from the above observations. Firstly, once the promise is solemnly given by the State with an intention that when acted upon, it would create a legal relation and acting on it the promisee has changed his/her position and incurred liability, the State must be held…

Related Judgements

  1. Binani Cement Ltd vs. CIT (Calcutta High Court) 

    Expenditure made for construction/acquisition of new facility subsequently abandoned at the work-in-progress stage is allowable as incurred wholly or exclusively for the purpose of assessee’s business. It is revenue expenditure as it does not result in the acquisition of an asset or an advantage of an enduring natureRead more…
  2. Sandvik Asia Limited vs. DCIT (Bombay High Court) 

    This payment made by the Appellant in its nature is different from a payment made to protect the property. In fact, Supreme Court in the case of Assam Bengal Cement Co. Ltd. v/s. CIT 27 ITR 34 while laying down the criteria to decide/ determine whether the payment is…
  3. CIT vs. Manganese Ore India Limited (Bombay High Court) 

    On the question was to whether if the project does not materialize and an asset is not created, expenditure on steps in that direction must be treated as capital expenditure or revenue expenditure, the Supreme Court in Commissioner of Income Tax vs. Madras Auto Service (P) Ltd., reported at…
  4. Indian Aluminum Company vs. CIT (Calcutta High Court) 

    The concept of enduring benefit must respond to the changing economic realities of the business. The expenses incurred by installation of software packages in the present computer world, which revolves on the modern communication technology, enables the assessee to carry on its business operations effectively, efficiently, smoothly and profitably….
  5. CIT vs. Micro Instruments Company (P&H High Court) 

    An assessee must fulfill each of the conditions stipulated in Section 80-IB in each of the years in which the deduction thereunder is sought. The Assessing Officer would be entitled to ascertain in each of the assessment years whether or not the conditions of Section 80-IB remained fulfilled. In…

Leave a Reply

Your email address will not be published. Required fields are marked *

*