w w w . L a w y e r S e r v i c e s . i n



Commissioner of Income Tax v/s National Steel and General Mills Private Limited


Company & Directors' Information:- GENERAL MILLS INDIA PRIVATE LIMITED [Active] CIN = U15510MH1995PTC094741

Company & Directors' Information:- K STEEL PRIVATE LIMITED [Strike Off] CIN = U27104JH1973PTC000998

Company & Directors' Information:- NATIONAL CO LTD [Strike Off] CIN = U51909WB1917PLC002781

Company & Directors' Information:- G M MILLS PRIVATE LIMITED [Active] CIN = U51900MH1999PTC122189

Company & Directors' Information:- NATIONAL STEEL AND GENERAL MILLS PRIVATE LIMITED [Active] CIN = U99999DL1970PTC005258

Company & Directors' Information:- STEEL AND GENERAL MILLS CO LIMITED [Active] CIN = U27109DL1956PLC002653

Company & Directors' Information:- K STEEL & COMPANY PVT LTD [Strike Off] CIN = U51909WB1991PTC053960

Company & Directors' Information:- N S STEEL PVT LTD [Strike Off] CIN = U27106PB1980PTC004266

Company & Directors' Information:- NATIONAL STEEL CORPORATION LTD [Strike Off] CIN = U27100WB1942PLC020862

Company & Directors' Information:- G M MILLS PRIVATE LIMITED [Amalgamated] CIN = U18101MH2003PTC138487

Company & Directors' Information:- STEEL MILLS OF INDIA PVT LTD [Strike Off] CIN = U27109WB1955PTC022703

Company & Directors' Information:- NATIONAL CORPORATION PVT LTD [Not available for efiling] CIN = U51909PB1942PTC000480

Company & Directors' Information:- STEEL INDIA PRIVATE LIMITED [Strike Off] CIN = U00349KA1958PTC001309

    ITC No. 6 of 1986

    Decided On, 22 August 1990

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE B.N. KIRPAL & THE HONOURABLE MS. JUSTICE SANTHOSH DUGGAL

    For the Appearing Parties : -----



Judgment Text

B.N. KIRPAL, J.


The petitioner is seeking reference of the following question to this court,



"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee's claim for Rs. 2, 86, 596 was allowable being incidental to the carrying on of business ?"


There is a dispute between the assessee and the BHEL. The said BHEL was to be supplied some material within a stipulated period which was not done. On account of this, the said BHEL claimed damages amounting to Rs. 2, 86, 596 by its letter dated March 27, 1976. Representations were made against the demand by the assessee-company but without any success. The sum of Rs. 2, 86, 596 was debited to the profit and loss account and deduction was claimed. Admittedly, the transaction between the assessee and BHEL was a business transaction and when the assessee failed to meet with its commitment, it became liable to pay the damages.


The question which is sought by the Department is only whether this claim was allowable as being incidental to the carrying on of the business. The answer to this is self-evident because it is only out of the business activities that the claim arose. It was a business contract which was entered into between the assessee and the BHEL and the assessee had to make supplies which it did not make within the stipulated period. Therefore, a claim arising therefrom can only be regarded as incidental to the carrying on of the business.


It is

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sought to be contended that the claim cannot arise in this year, but that is not the question sought to be raised. The application is, accordingly, dismissed.
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