| Case ID |
e2673d5c-e51b-4eb8-840f-d9d09b8cf5e3 |
| Body |
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| Case Number |
ITR No. 172 of 1974 |
| Decision Date |
Apr 19, 1978 |
| Hearing Date |
|
| Decision |
The court held that the expenditure incurred by the assessee in organizing football and hockey tournaments was wholly for the purpose of business and thus allowable deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922. The tournaments provided significant advertising value to the company, enhancing its prominence and reputation. The court emphasized that the expenses were incurred exclusively for business purposes, which aligns with the principles of ordinary commercial trading. The Tribunal's decision to allow full deduction was upheld, reinforcing the notion that expenses providing indirect benefits to business qualify as deductible under tax law. |
| Summary |
In the case of Commissioner of Income Tax v. Delhi Cloth & General Mills Co. Ltd., the Delhi High Court examined the deductibility of expenses incurred by the D.C.M. Group in organizing annual hockey and football tournaments. The court determined that these expenditures were entirely for business purposes, aligning with the provisions of the Income-tax Act, 1961, and the Indian Income-tax Act, 1922. The court noted that such tournaments not only improved the company's advertising visibility but also served as a recreational amenity for employees, thus furthering business interests. This case underscores the importance of understanding what constitutes business expenditure and highlights the legal principles governing deductibility in commercial contexts. Keywords: business expenditure, tax law, deductible expenses, Income-tax Act, advertising value. |
| Court |
Delhi High Court
|
| Entities Involved |
Delhi Cloth & General Mills Co. Ltd.
|
| Judges |
T.V.R. Tatchari, C.J.,
S. Ranganathan, J.
|
| Lawyers |
M.L. Verma for the Applicant.,
V.S. Desai and D.N. Misra for the Respondent.
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Delhi Cloth & General Mills Co. Ltd.
|
| Citations |
1978 SLD 823,
(1978) 115 ITR 659
|
| Other Citations |
Atherton v. British Insulated and Helsby Cables Ltd. [1925] 10 TC 155 (HL),
Central India Spg. Wvg. and Mfg. Co. Ltd. v. CIT [1943] 11 ITR 266 (Nag.),
CIT v. Chandulal Keshavlal and Co. [1960] 38 ITR 601 (SC),
Eastern Investments Ltd. v. CIT [1951] 20 ITR 1(SC),
Gillatt and Watts v. Colquhoun [1884] 2 TC 76 (KB),
Hindustan Commercial Bank Ltd., In re [1952] 21 ITR 353 (All.),
Robert Addie and Sons' Collieries Ltd. v. IRC [1924] 8 TC 671 (C. Sess),
Southern v. Aldwych Property Trust Ltd. [1940] 23 TC 707 (KB),
Ward and Co. Ltd. v. Commissioner of Taxes [1923] AC 145 (PC)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
37(1),
10(2)(xv)
|