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1 - 10 of 18 (0.30 seconds)Union Carbide India Ltd. vs Commissioner Of Income-Tax on 28 April, 1980
In the case of Union Carbide India Ltd. vs. CIT , before the Division Bench of the Calcutta High Court, the following question was referred for its opinion :
Commissioner Of Income-Tax vs South India Viscose Ltd. on 28 February, 1979
The special leave petition filed against this judgment was rejected by the Supreme Court as can be seen from (1983) 143 ITR (St) 60 . The Tribunal distinguished this decision on facts stating that it related to payment of the purchase price directly to the supplier when the exchange fluctuation in fact increased the cost of the machinery purchased. It was further pointed out that this decision is concerned with the guarantee commission paid by the assessee to the State Bank of India which stood as a guarantor for the repayment of the purchase money. But it remains to be seen that what was paid by way of additional amount by the assessee to the company was for the purchase of machinery. The fact that in the present case the assessee had paid the additional amount due to fluctuation in the exchange rate to the financier ICICI would also go towards the cost of the purchase of the machinery since the ICICI in turn paid the additional amount to the seller through the foreign financier. Therefore, it cannot be said that the decision in the case of CIT vs. South India Viscose Ltd. (supra), cannot be made applicable to the facts of this case.
Sivakami Mills Ltd. vs Commissioner Of Income-Tax on 27 February, 1979
(ii) That the decision in the case of Sivakami Mills Ltd. vs. CIT should be applied and not the decision in the case of South India Viscose Ltd. which was distinguishable on facts,
The Income Tax Act, 1961
Mopeds India Ltd. vs Commissioner Of Income-Tax on 21 March, 1987
A similar question arose for consideration before the Andhra Pradesh High Court in the case of Mopeds India Ltd. vs. CIT . According to the facts arising in that case, the assessee, a public limited company, engaged in the manufacture and sale of mopeds purchased some machinery from a French manufacturer. The assessee was granted a foreign exchange loan by a German financier. The assessee was to repay the said loan in instalments, to be remitted through the ICICI. The assessee had to pay the sum in rupees, i.e., the rupee equivalent of the instalment to the ICICI, which was to remit the instalment in foreign currency. On the question whether the extra payments made due to variation in exchange rates was allowable as revenue expenditure, it was held that the amounts represented capital expenditure for acquisition of plant and machinery and were not deductible.
Padamjee Pulp And Paper Mills Ltd. vs Commissioner Of Income-Tax on 26 October, 1993
So also in the case of Padamjee Pulp & Paper Mills Ltd. vs. CIT (1994) 210 ITR 97 (Bom), while answering a question of similar nature, the Bombay High Court, held that the additional liability on account of fluctuations in the foreign exchange rates in respect of liability incurred for import of machinery would not constitute revenue expenditure. It was further held that in view of s. 43A of the IT Act, 1961 the additional liability amounting to Rs. 21,36,840 and Rs. 4,89,502 on account of exchange fluctuations with reference to the amount of loan outstanding on the last day of the accounting period at the then prevailing exchange rate had to be added to the actual cost of the machinery for the purpose of computation of depreciation for that year.
India Cements Ltd., Madras vs Commissioner Of Income-Tax, Madras on 8 December, 1965
6. On the other hand, learned counsel appearing for the assessee relied upon a decision in the case of India Cements Ltd. vs. CIT . According to the facts arising in this case, the appellant obtained a loan of Rs. 40 lakhs from the Industrial Finance Corporation secured by a charge on its fixed assets. In connection therewith it spent a sum of Rs. 84,633 towards stamp duty, registration fees, lawyer's fees, etc., and claimed this amount as business expenditure.
Bombay Steam Navigation Co. (1953) ... vs Commissioner Of Income-Tax, Bombay on 21 October, 1964
Learned counsel for the assessee also relied upon a decision in the case of Bombay Steam Navigation Co. (1953) Pvt. Ltd. vs. CIT (1965) 56 ITR 52 (SC). In that decision, the Supreme Court held that in considering whether expenditure is revenue expenditure, the Court has to consider the nature and the ordinary course of business and the objects for which the expenditure is incurred. The question whether a particular expenditure is revenue expenditure incurred for the purpose of the business must be viewed in the larger context of business necessity or expediency. If the outgoing of expenditure is so related to the carrying on or conduct of the business that it may be regarded as an integral part of the profit-earning process and not for acquisition of an asset or a right of a permanent character, the possession of which is a condition to the carrying on of the business, the expenditure may be regarded as revenue expenditure. In this decision, the question that came up for consideration is whether the interest paid by the assessee is allowable as a deduction under the IT Act under any of the s. 10(2)(iii), 10(2)(xv) or 10(1). While answering the question, the Supreme Court enunciated the abovesaid test in order to find out whether a particular expenditure is revenue expenditure or not. According to the facts arising in that case, there is no question of payment of interest. Therefore, the principle contemplated by the Supreme Court in the above cited decision would not be helpful to support the assessee's case.