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Documents citing Commissioner Of Income-Tax vs United General Trust Ltd. on 19 February, 1993

Assistant Commissioner Of Income Tax vs Eicher Ltd. on 27 January, 2006

First, that the High Courts have not authorised the disallowance of any notional expenditure (as against actual expenditure) to reduce the income in respect of which deduction is claimed and second, that in the cases before the Calcutta High Court in Enemour Investments Ltd. (supra) and the Madhya Pradesh High Court in State Bank of Indore (supra) even the Revenue has not relied on the judgment of the Supreme Court in CIT v. United General Trust Ltd. (supra) thereby suggesting that in its understanding also that judgment cannot be understood as authority for permitting an estimated or notional expenditure to be disallowed in order to reduce the income eligible for the deduction.
Income Tax Appellate Tribunal - Delhi Cites 47 - Cited by 108 - Full Document

Southern Petro Chemical Industries vs Deputy Commissioner Of Income Tax on 20 October, 2004

6. We have considered the rival submissions and perused the records of the case. Admittedly, these investments in shares were made during the course of the carrying on of business and as is evident from the records, substantial investments had been made by the assessee in earlier years, and during the current year as well the assessee made an investment of Rs. 19 crores. Whether to invest or not to invest and whether to retain the investments or to liquidate the same are very strategic decisions which the management is called upon to take. These are mind-boggling decisions and top management is involved in taking these decisions. This decision making process is very complicated and requires very careful analysis. Moreover, the assessee has to keep track of various dividend incomes declared by the investee companies and also to keep track of the dividend income having been regularly received by the assessee. This activity itself calls for considerable management attention and cannot be left to a junior clerk. The Hon'ble Supreme Court in the case of United General Trust Ltd. (supra), applying the decision of Hon'ble Supreme Court in the case of Distributors (Baroda) (P) Ltd. v. Union of India (1985) 155 ITR 120 (SC), reversed the decision of the Hon'ble Bombay High Court in CIT v. United General Trust (P) Ltd. (supra), wherein the question was as under :
Income Tax Appellate Tribunal - Chennai Cites 59 - Cited by 20 - Full Document

Saurashtra Fuels P.Ltd, Mumbai vs Assessee on 6 June, 2016

" We have considered the rival submissions and perused the records of the case. Admittedly, these investments in shares were made during the course of the carrying on of business and as is evident from the records, substantial investments had been made by the assessee in earlier years, and during the current year as well the assessee made an investment of Rs. 19 crores. Whether to invest or not to invest and whether to retain the investments or to liquidate the same are very strategic decisions which the management is called upon to take. These are mind-boggling decisions and top management is involved in taking these decisions. This decision making process is very complicated and requires very careful analysis. Moreover, the assessee has to keep track of various dividend incomes declared by the investee companies and also to keep track of the dividend income having been regularly received by the assessee. This activity itself calls for considerable management attention and cannot be left to a junior clerk. The Hon'ble Supreme Court in the case of United General Trust Ltd. (supra), applying the decision oi Hon'ble Supreme Court in the case of Distributors (Baroda) (P) Ltd. v. Union of India (1985) 47 CTR (SC) 349: (1985) 155 ITR 120 (SC), reversed the decision of 59 ITA 7273-74/Mum/2012 the Hon'ble Bombay High Court in CIT v. United General Trust (P) Ltd. (supra), wherein the question was as under:
Income Tax Appellate Tribunal - Mumbai Cites 52 - Cited by 0 - Full Document

Commissioner vs Demuric on 21 September, 2010

The Assessing Officer, while framing the assessment, has simply observed that the deduction on account of incorporate dividend is to be allowed with reference to the net dividend income in view of judgement in the case of CIT v. United General Trust Ltd. (supra) to the effect that proportionate management expenses should be deducted from the gross dividend. This observation was made by the apex court in the said judgement keeping in view the provisions contained in section 80M of the Act. However, in the year under consideration, i.e. assessment year 1998-99, section 80M was not force. A specific contention was raised by the assessee before the CIT (A) that section 80M of the Act was omitted by the Finance Act, 1997 w.e.f. 1.4.1998 and the respondent assessee had neither proposed any dividend nor paid any dividend during the relevant previous year. It was, therefore, held that the re-assessment proceedings under section 147 of the Act was invalid in the eyes of law and the same deserves to be quashed.
Gujarat High Court Cites 15 - Cited by 0 - K A Puj - Full Document

V.Ramakrishna Sons Pvt Ltd., Chennai vs Assessee on 5 July, 2012

10. As far as the case law relied upon by the Revenue is concerned ie., CIT v. United General Trust (supra), we find the same to be distinguishable on facts of the instant case In that case, the Hon'ble Apex Court did not decide the issue of co-relation of expenditure, but had dealt with the submission of reasonableness of disallowance. Therefore, the same is not applicable to the facts of the instant case. Consequently, we find no reason to agree with the disallowance made by the Assessing Officer and confirmed by the CIT(Appeals) under sec.14A of the Act. Hence, the Assessee's appeal stands allowed.
Income Tax Appellate Tribunal - Chennai Cites 8 - Cited by 0 - Full Document

Dic India Ltd, Kolkata vs Department Of Income Tax on 24 July, 2014

Subsequently the AO in the assessment made u/s 143(3) read with section 147 of the Act disallowed the proportionate management expenses as computed by him amounting to Rs.80,73,295/- The average rate of interest on the average loan @ 7.49% on identical ground and reasoning the income tax assessment for A.Yr.2000-01 was also reopened by the AO on 3rd December, 2003 relying on the decision of the Hon'ble Supreme Court in the case of CIT vs United General Trust Ltd. (supra). When this matter went before the ld. CIT(A) the ld. CIT(A) has given a finding that there was no material on record which in any manner that borrowed funds were utilised by the assessee for making investment in shares. Unless the nexus between the expenditure and the earning of the dividend from investment in shares were proved, disallowance on estimate basis cannot be made. The ld. CIT(A) quashed the re-assessment. On further appeal the Tribunal upheld the order of the CIT(A) vide its order dated 28th April, 2006. The assessee acquired shares of the wholly subsidiary company in the A.Yr.1998-99. Therefore there was no finding that the investment in the subsidiary was made out of the borrowed funds in A.Yr.1998-99 to A.Yr.2002-03 and also in A.Yr.2004-05. We noted that in A.Yr.2005-06 the AO has made similar disallowances which was deleted by the ld. CIT(A), against which the revenue has not filed any appeal. During the impugned year also we noted that the ld. CIT(A) has given a categorical finding that the investment in the subsidiary company was made in the financial year 1997-98 and thereafter no further investment was made by the assessee in the subsidiary company. It is not a case where the borrowed funds were utilized by the assessee for acquiring ITA No.221/Kol/2012& C.O.27/Kol/2012 4 DIC India Ltd.
Income Tax Appellate Tribunal - Kolkata Cites 7 - Cited by 0 - Full Document

Dic India Limited, Kolkata vs Assessee on 24 July, 2014

Subsequently the AO in the assessment made u/s 143(3) read with section 147 of the Act disallowed the proportionate management expenses as computed by him amounting to Rs.80,73,295/- The average rate of interest on the average loan @ 7.49% on identical ground and reasoning the income tax assessment for A.Yr.2000-01 was also reopened by the AO on 3rd December, 2003 relying on the decision of the Hon'ble Supreme Court in the case of CIT vs United General Trust Ltd. (supra). When this matter went before the ld. CIT(A) the ld. CIT(A) has given a finding that there was no material on record which in any manner that borrowed funds were utilised by the assessee for making investment in shares. Unless the nexus between the expenditure and the earning of the dividend from investment in shares were proved, disallowance on estimate basis cannot be made. The ld. CIT(A) quashed the re-assessment. On further appeal the Tribunal upheld the order of the CIT(A) vide its order dated 28th April, 2006. The assessee acquired shares of the wholly subsidiary company in the A.Yr.1998-99. Therefore there was no finding that the investment in the subsidiary was made out of the borrowed funds in A.Yr.1998-99 to A.Yr.2002-03 and also in A.Yr.2004-05. We noted that in A.Yr.2005-06 the AO has made similar disallowances which was deleted by the ld. CIT(A), against which the revenue has not filed any appeal. During the impugned year also we noted that the ld. CIT(A) has given a categorical finding that the investment in the subsidiary company was made in the financial year 1997-98 and thereafter no further investment was made by the assessee in the subsidiary company. It is not a case where the borrowed funds were utilized by the assessee for acquiring ITA No.221/Kol/2012& C.O.27/Kol/2012 4 DIC India Ltd.
Income Tax Appellate Tribunal - Kolkata Cites 7 - Cited by 0 - Full Document
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