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Commissioner Of Income-Tax vs H.C. Shankarappa on 9 July, 1998 cites

Produce Exchange Corporation Ltd vs Commissioner Of Income Tax on 27 April, 1970

"That it could not be disputed that the business organisation, administration and fund of both the units of the assessee, namely, the unit at Baroda and the unit at Bangalore, were common. There was one company which controlled the administration of both the units, which supplied the staff to both the units and which managed the whole of the business organisation of both the units. The production of both the units was considered the production of the assessee-company itself. In the application for the proposed establishment of the new unit at Bangalore made by the assessee to the Government of India on December 8, 1959, and in the application for licence submitted by the assessee to the Government, it was stated that the new unit at Bangalore was nothing but an expansion of the existing business. Thus, there was complete interconnection, interlacing and interdependence of both the units, which is the test laid down for determining whether two lines of businesses constitute the 'same business' within the meaning of Section 24(2), by the Supreme Court in the case of CIT v. Prithvi Insurance Co. Ltd., and again approved by the Supreme Court in Produce Exchange Corporation Ltd. v. CIT, ."
Supreme Court of India Cites 5 - Cited by 89 - J C Shah - Full Document

Commissioner Of Income-Tax, Madras vs Prithvi Insurance Co. Ltd on 26 October, 1966

"That it could not be disputed that the business organisation, administration and fund of both the units of the assessee, namely, the unit at Baroda and the unit at Bangalore, were common. There was one company which controlled the administration of both the units, which supplied the staff to both the units and which managed the whole of the business organisation of both the units. The production of both the units was considered the production of the assessee-company itself. In the application for the proposed establishment of the new unit at Bangalore made by the assessee to the Government of India on December 8, 1959, and in the application for licence submitted by the assessee to the Government, it was stated that the new unit at Bangalore was nothing but an expansion of the existing business. Thus, there was complete interconnection, interlacing and interdependence of both the units, which is the test laid down for determining whether two lines of businesses constitute the 'same business' within the meaning of Section 24(2), by the Supreme Court in the case of CIT v. Prithvi Insurance Co. Ltd., and again approved by the Supreme Court in Produce Exchange Corporation Ltd. v. CIT, ."
Supreme Court of India Cites 12 - Cited by 119 - J C Shah - Full Document

Commissioner Of Income-Tax, Karnataka vs Insotex (Private) Limited on 29 August, 1983

In CIT v. Insotex (Private) Ltd., , the Income-tax Officer for the assessment years 1974-75 and 1975-76 disallowed the benefit of deduction as business expenditure incurred by the assessee on the borrowed capital utilised for importing machines to replace the old machines and for purchasing the land on the ground that the machinery purchased was not used for production in the relevant accounting year. It was held that the assessee was entitled to adjust the payment of interest towards revenue expenditure holding that when once it was proved that the assessee has utilised the same for the purpose of business, then he was entitled to the adjustment of the interest on the money borrowed as revenue expenditure.
Karnataka High Court Cites 4 - Cited by 9 - Full Document

Commissioner Of Income-Tax, Gujarat Ii vs Alembic Glass Industries Ltd. on 21 November, 1975

In CIT v. Alembic Glass Industries Ltd., , the Gujarat High Court held that where there was interconnection and interdependence and unity between the existing business and the new unit, then the interest levied on the borrowed capital would be a revenue expenditure. In that case, the assessee was a company manufacturing glass at Baroda from 1947. During the accounting period relating to the assessment years 1965-66 and 1966-67, the company incurred expenditure of Rs. 7,53,084 and Rs. 77,00,000, respectively, for establishing a new glass manufacturing unit at Bangalore. The said unit did not go into production during the two assessment years in question, and, therefore, during the course of assessment, the Income-tax Officer disallowed the payment of interest of Rs. 50,000 and Rs. 2,00,000, respectively, in the two years on such borrowings. The Income-tax Officer further held that the Bangalore unit was not a branch of the assessee's factory and was, therefore, a new business, and, since the new business had not started production, the payment of interest could not be taken as revenue expenditure. Miscellaneous expenditure like travelling expenditure referable to the establishment of the Bangalore unit was also disallowed. The appeal was accepted by the first appellate authority which order was confirmed by the Tribunal. The Revenue went up in reference to the High Court which was answered against the Revenue and in favour of the assessee holding (headnote) :
Gujarat High Court Cites 11 - Cited by 97 - Full Document

Continental Construction Ltd vs Commissioner Of Income-Tax, Central-1 on 15 January, 1992

"It is not disputed that for the purpose of carrying on the business the assessee had constructed certain buildings and for the purpose of meeting the expenditure incurred for constructing such buildings, the assessee borrowed monies and on such borrowings paid interest. We are of the view that the Tribunal was right in holding that the interest paid was deductible as revenue expenditure irrespective of the fact that the buildings in question had not been actually put to use for carrying on business during the accounting year by the assessee. This view accords with the view taken by a Division Bench of this court of which one of us was a member, in Ravi Machine Tools (P.) Ltd. v. CIT, . The question referred to us is, therefore, answered in the affirmative and against the department."
Supreme Court of India Cites 41 - Cited by 2319 - Full Document

India Cements Ltd., Madras vs Commissioner Of Income-Tax, Madras on 8 December, 1965

3. On further appeal by the Department, the Tribunal dismissed the Department's appeals by relying upon its earlier decision for the assessment year 1981-82. It was held by the Tribunal that since the business of the assessee had not commenced and the loan had been taken and utilised by the assessee for the further expansion of the business the interest paid by the assessee on such loan was deductible as revenue expenditure. Reliance was placed upon a decision of the Supreme Court in the case of India Cements Ltd. v. CIT, ,
Supreme Court of India Cites 20 - Cited by 495 - S M Sikri - Full Document

Challapalli Sugar Ltd vs The Commissioner Of Income Tax, A.P. ... on 31 October, 1974

In Challapalli Sugars Ltd.'s case , the Supreme Court was considering whether the interest paid on amounts borrowed for the acquisition and installation of plant and machinery forms part of the actual cost entitling the assessee to depreciation allowance and development rebate with reference to such interest also. The assessee was a public limited company engaged in the manufacture and sale of sugar. The company went into production on January 22, 1958. The assessee-com-pany had borrowed considerable sums of money from the Industrial Finance Corporation of India for the installation of machinery and plant. During the relevant year and for the period prior to the commencement of its business the assessee paid Rs. 2,38,614 as interest. The case of the assessee was that the payment of interest be added to the cost of machinery and plant of the assessee and as such while calculating depreciation admissible to the assessee the interest paid should be considered as part of the cost of the machinery and plant to the assessee. Their Lordships of the Supreme Court accepted this contention of the assessee and held (headnote) :
Supreme Court of India Cites 28 - Cited by 416 - H R Khanna - Full Document
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