Joint Commissioner Of Income Tax vs Jamuna Auto Industries Ltd. on 24 August, 2004
(i) CIT v. Chase Bright Steel Ltd. (supra)
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7. We have considered the rival submissions carefully and find
force in the submissions of the Ld.counsel of the assessee. It is clear
from the assessment order that the sum of Rs.3,094,98,753/- has been
shown as outstanding as sundry creditors. Which means the same has
not been written off by the assessee and is being shown as
outstanding liability. We further fund that the Hon'ble Bombay High
Court in the case of CIT vs. Chase Bright Steel Ltd. [supra] has
discussed the issue in detail and had observed at paged 134 as under:
Mahindra & Mahindra Ltd. vs Deputy Commissioner Of Income-Tax on 18 February, 1997
The Bombay High Court decisions in Ocean Carriers (P.) Ltd.'s case (supra) and in Raja Bahadur Motilal Poona Mills Ltd.'s case (supra) contained no reference to the earlier two decisions of the same court in Chase Bright Steel Ltd. (No. 1)'s case (supra) and Century Spg. & Mfg. Co. Ltd.'s case (supra) and furthermore because, the latter decisions and the earlier decisions are all issued by Division Benches, the latter decisions cannot be said to have overruled the earlier decisions. Because, the latter decisions did not contain any reference to the earlier decisions, the latter decisions are perhaps issued per in curium, i.e., in ignorance of the existence of an earlier decision and further because, the latter decisions had no fresh material like the decision of the apex court without which, it could be difficult to hold that the latter decisions should hold the field in preference to the earlier decisions. At best it could be said that the Bombay High Court had given two views on the subject of allowance or non-allowance of expenses concerning guest house.
Dy. Cit vs Hindustan Zinc Ltd. on 16 October, 2001
The Gujarat High Court in CIT v. Ahmedabad Mfg. & Calico Printing Co. Ltd. (1992) 197 ITR 538 (Guj) and the Bombay High Court in CIT v. Chase Bright Steel Ltd. (supra) have taken the view that the disallowance under section 37(4) shall be restricted to the expenditure allowable under sub-section (1) or (3) of section 37 only and the expenditure admissible under other sections say section 30 (rent) or section 32 (depreciation) is not disallowable under section 37(4), though the expenditure may be related to a guest-house.
Deputy Commissioner Of Income Tax vs Hindustan Zinc Ltd. on 16 October, 2001
The Gujarat High Court in CIT v. Ahmedabad Mfg. & Calico Printing Co. Ltd. (1992) 197 ITR 538 (Guj) and the Bombay High Court in CIT v. Chase Bright Steel Ltd. (supra) have taken the view that the disallowance under Section 37(4) shall the restricted to the expenditure allowable under sub-s. (1) or (3) of Section 37 only and the expenditure admissible under other sections, say Section 30 (rent) or Section 32 (depreciation) is not disallowable under Section 37(4), though the expenditure may be related to a guest-house.
South Eastern Coalfields Ltd. vs Joint Commissioner Of Income Tax on 28 February, 2002
Learned counsel for the assessee relied on the decisions in CIT v. Chase Bright Steel Ltd. (supra) and CIT v. Ahmedabad Mfg. & Calico Printing Co. Ltd. (1992) 197 ITR 538 (Guj) in support of its contention. On examining these decisions, we find the first decision which is rendered by the Bombay High Court, considered a case prior to the introduction of Sub-section (4) and (5) of Section 37. The second decision which was rendered by the High Court of Gujarat, just followed the Bombay High Court's decision even though, by that time, Sub-section (4) of Section 37 had been introduced. We are not inclined to follow the above decisions in the present case.
State Bank Of Bikaner & Jaipur vs Deputy Commissioner Of Income Tax on 29 October, 1998
In case of CIT v. Chase Bright Steel Ltd. (supra) the Hon'ble Bombay High Court has held that the expenditure on rent in respect of guest House was allowable under section 30 and the expenses on repairs and polishing of the furniture
In the guest house were allowable under section 31. They could not be disallowed under the provisions of s. 37(3).
Ajit Ramakant Phatarpekar, Panaji vs Department Of Income Tax on 16 March, 2015
Similar view has been taken by the Hon'ble Delhi High Court in CIT vs.
Hotline Electronics Ltd. The jurisdiction High Court i.e. the Bombay High Court in
the case of CIT vs. Chase Bright Steel Ltd. 177 ITR 128 took the view that the
liability of the Assessee does not cease merely because the liability has become
barred by limitation. The liability ceases when it has become barred by limitation
and the Assessee has unequivocally expressed his intention not to honour the
liability even when demanded. It is not the case of the revenue that the Assessee has
expressed his intention not to honour the liability. From the chart of the Sundry
Creditors which has been filed before us and is available in the paper book, we also
noted that the Assessee has made the payment in respect of some of the liabilities in
the subsequent year. Therefore, under the facts and circumstances of the case, we
23 ITA NOS. 145 & 146/PNJ/2014 (A.Y 2010-11)
are of the firm view that there is no cessation of liability in terms of Sec. 41(1) of the
Income Tax Act. We, accordingly, confirm the order of CIT(A) deleting the addition.
Thus, this ground stands dismissed."
D.R. Desai vs Thirteenth Income-Tax Officer on 26 August, 1993
45. Let me now refer to the assessee's reliance on the Bombay High Court decision in the case of CIT v. Chase Bright Steel Ltd. (No. 2) [1989] 177 ITR 128 and also on the Bombay High Court decision in J. K. Chemicals Ltd. [1966] 62 ITR 34. Both these cases are undoubtedly in favour of the assessee. But in both of them, the factual background was that some items were written back by the assessees to the credit side of the profit and loss account and it was held that merely a unilateral act of any assessee to write back part of amounts allowed as deduction in past years would not result in cessation of liability. Obviously, the case before me is one of refund actually received and not where some deduction allowed in the past is being written back unilaterally to the credit side of the profit and loss account. So on the factual basis these two cases are distinguishable from the instant case.
Commissioner Of Income-Tax vs Travancore Cements Ltd. on 22 September, 1999
Steel Tubes of India Ltd. (No. 2) [1997] 228 ITR 418 followed the decision of the Bombay High Court in CIT v. Chase Bright Steel Ltd. (No. 1) [1989] 177 ITR 124 and held that repairs of cars are to be excluded from the purview of Section 37(3A).