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Documents citing Commissioner Of Income-Tax, Tamil Nadu vs Carborundum Universal Ltd. on 3 August, 1983

Commissioner Of Income-Tax vs Prasad Productions P. Ltd. on 31 January, 1989

In other words, if a person carries on the business of production of films, he may not only produce the films but also prepare the positive prints for the purpose of exhibition or he may not take steps for the exhibition of the film having produced it. The production and exhibition of a feature film constitutes two distinct and separate stages and while the former would take in all activities which culminate in the production of a feature film, the latter contemplates a stage subsequent to the completion of the production of the film, viz., exhibition of the film produced. Viewed thus, any expenditure incurred in connection with the preparation of the positive prints for purposes of exhibition would really be post-production expenses and also an item of expenditure in relation to business of production and exhibition of feature films and would, therefore, quality for deduction as expenditure laid out or expended wholly and exclusively for the purpose of the business. We have not been referred to any provision in the Act or the rules disallowing such expenditure as an item of business expenditure for the purpose of section 37 of the Act. Though learned counsel for the Revenue placed considerable reliance upon the decision in CIT v. Carborundum Universal Ltd. [1977] 110 ITR 621 (Mad), we are of the view that decision does not in any manner assist the Revenue. In that case, the assessee claimed deduction of a certain amount in the computation of its profits and gains of the business by way of contribution to the superannuation fund of its foreign collaborators and that claim was disallowed by the authorities below. However, the Tribunal held that though that amount was not an allowable deduction under section 36(1)(iv) of the Act as the contribution was not to a recognised provident fund or to an approved superannuation fund nor could be allowed under section 37 of the Act, the payment was allowable under section 28 of the Act. On a reference, it was held that the nature of payment being one described in section 36(1)(iv) of the Act and as it could not be deducted under the section, it could be held to be deductible under section 28 of the Act on general principles in arriving at the true profits and gains of the business in a commercial sense. In the view we have taken that the expenditure incurred in connection with the obtaining of positive prints is really in the nature of post-production expenditure and that there is no provision in the Act or the rules obliging the authorities to disallow such expenditure, the claim of the assessee that such expenditure would fall under section 37 of the Act is, in our view, well-founded. We, therefore, answer the second question referred to us in the affirmative and against the Revenue.
Madras High Court Cites 17 - Cited by 45 - Full Document

Motor Industries Co. Ltd. vs Inspecting Assistant Commissioner. on 29 June, 1995

The case of Carborandum Universal Ltd. (supra) is another authority. The revenue has allowed the opening balance of the next year to remain. So, it would be improper to disturb the book profits only in a solitary year solely on the reason that it has some tax benefit to the assessee. Such benefit is only incidental to the change as the change itself is not one intended to get the benefit. For the above reasons we uphold the order of the CIT (Appeals) deleting the additions. This disposes of grounds 1 to 5.
Income Tax Appellate Tribunal - Bangalore Cites 19 - Cited by 1 - Full Document

Goodyear India Ltd. vs Income Tax Officer. (Asstt. Cit V. ... on 31 January, 2000

15. The learned Judicial Member also examined s. 37(1) and observed that the words in bracket "[not being expenditure of the nature prescribed in ss. 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee]" were significant because ss. 30 to 36 have been excluded from s. 37(1) which is treated as residuary section. Considering the above, and decisions in CIT vs. High Land Produce Co. Ltd. (1976) 102 ITR 803 (Ker), CIT vs. Carborundum Universal Ltd. (1977) 110 ITR 621 (Mad), Nathmal Bankatlal Parikh & Co. vs. CIT (1980) 122 ITR 168 (AP) and Chenab Forest Co. vs. CIT (1974) 96 ITR 568 (J&K), he held that it was clear that once any expenditure is covered under ss. 30 to 36 that shall not be the subject-matter of allowability under s. 37(1). Since the claim of the assessee was covered under s. 35AB, as held by him, the same had to be disposed of under s. 35AB and not under s. 37(1).
Income Tax Appellate Tribunal - Delhi Cites 94 - Cited by 58 - Full Document

Indus Ind Bank Ltd., Mumbai vs Department Of Income Tax on 24 March, 2005

"The two principles applicable with regard to the valuation of stock are that the assessee is entitled to value the closing stock either at cost price or market value, whichever is lower, and that the closing stock must be the value of the opening stock in the succeeding year. It is, thus clear that irrespective of the basis adopted for valuation in the 12 ITA NO.4343& 4535/MUM/2005(A.Y. 2001-02) earlier years, the assessee has the option to change the method of valuation of the closing stock at cost or market price, whichever is lower, provided the change in bona fide and followed regularly thereafter. Thus, the value of the closing stock of the preceding year must be the value of the opening stock of the next year. The change, therefore, has to be effected by adopting the new method for valuing the closing stock which will, in its turn, become the value of the opening stock of the next year. If, instead, a procedure is adoped for changing the value of the opening stock, it will lead to a chain reaction of changes in the sense that the closing value of the stock of the year preceding will also have to change and correspondingly the value of the opening stock of that year and so on.- CIT v. Carborandum Universal Ltd. [1984] 149 ITR 759 (Mad); CIT vs. Mopeds India Ltd. [1988] 173 ITR 347 (AP) & Triveni Engineering Works Ltd. vs. CIT (1987] 167 ITR 742 (All) followed.
Income Tax Appellate Tribunal - Mumbai Cites 16 - Cited by 0 - Full Document

Indus Ind Bank Ltd., Mumbai vs Assessee on 24 March, 2005

"The two principles applicable with regard to the valuation of stock are that the assessee is entitled to value the closing stock either at cost price or market value, whichever is lower, and that the closing stock must be the value of the opening stock in the succeeding year. It is, thus clear that irrespective of the basis adopted for valuation in the 12 ITA NO.4343& 4535/MUM/2005(A.Y. 2001-02) earlier years, the assessee has the option to change the method of valuation of the closing stock at cost or market price, whichever is lower, provided the change in bona fide and followed regularly thereafter. Thus, the value of the closing stock of the preceding year must be the value of the opening stock of the next year. The change, therefore, has to be effected by adopting the new method for valuing the closing stock which will, in its turn, become the value of the opening stock of the next year. If, instead, a procedure is adoped for changing the value of the opening stock, it will lead to a chain reaction of changes in the sense that the closing value of the stock of the year preceding will also have to change and correspondingly the value of the opening stock of that year and so on.- CIT v. Carborandum Universal Ltd. [1984] 149 ITR 759 (Mad); CIT vs. Mopeds India Ltd. [1988] 173 ITR 347 (AP) & Triveni Engineering Works Ltd. vs. CIT (1987] 167 ITR 742 (All) followed.
Income Tax Appellate Tribunal - Mumbai Cites 16 - Cited by 0 - Full Document

Veera Exports, Surat vs Assessee on 26 June, 2013

CIT v. British Paints India Ltd. [1991] 188 ITR 44 (SC) CIT v. Carborandum Universal Ltd. [1984] 149 ITR 759 (Mad) CIT v. Dalmia Cement (Bharat) Ltd. [1955] 215 ITR 441 (Delhi) CIT v. Delta Plantation Ltd. [1993] 114 CTR 271 (Cal) CIT v. Ganga Charity Trust Fund [1986] 162 ITR 612 (Guj) CIT vs. Haryana Minerals Ltd. [2000] 242 ITR 704 (P & H) Kalpetta Estates Ltd. v. CIT& [1966] 221 ITR 601 (SC) McDowell and Co. Ltd. v. Commercial Tax Officer [1985] 154 ITR 148 (SC); [1985] 59 STC 277 (SC) Income-tax Application No.351 of 1999 with Tax Appeals Nos. 758 to 761 of 1999
Income Tax Appellate Tribunal - Ahmedabad Cites 24 - Cited by 0 - Full Document

The Commissioner Of Income Tax vs M/S.George Oakes Ltd on 6 June, 2007

Under such circumstances, in the year of change, some discrepancy is bound to happen in the profitability of the company as compared to previous year. However, in succeeding years, there will not be any discrepancy on this account. When the change of accounting method is bona fide and also the same is recognised in accounting principle, the resultant variation in income cannot be forced to be taxed upon the assessee. This Court in the case of Commissioner of Income-tax, Tamil Nadu Vs. Carborandum Universal Ltd., reported in 149 ITR 759, considered the scope of change of method of accounting and held as follows:
Madras High Court Cites 3 - Cited by 19 - P P Raja - Full Document
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