M/S Mrf Ltd. v. the Joint Commissioner of

Madras HC28 Jan 2026TCA/925/2014

Case brief

AI extract

What is this about?

TCA 925 & 926 of 2014; MRF Ltd.; MRF Pace Foundation; pace bowler training; cricket sponsorship; advertisement and business-promotion expenditure; allowability of expenditure/deduction; donation versus genuine business expenditure; high advertisement value; promoting and sponsoring sports; Section 260A Income-Tax Act 1961 appeal; ITAT Madras 'A' Bench; ITA No.520/Mds/2014; ITA No.522/Mds/2014; AY 2009-10; AY 2010-11; Joint Commissioner of Income Tax Large Taxpayer Unit Chennai; 1128 taxmann.com 21 (Madras); 2173 taxmann.com 915 (Madras); Delhi Cloth and General Mills Co. Ltd.; appeals allowed; no costs; 2026:MHC:605.

What did the court decide?

Both Tax Case (Appeals) allowed in favour of the assessee, the three admitted questions of law answered in its favour, with no costs. ¶¶44

M/S Mrf Ltd. Vs the Joint Commissioner of — Income Tax | Madras HC (2026)

What the court decided

AI extract

Outcome

Both Tax Case (Appeals) allowed in favour of the assessee, the three admitted questions of law answered in its favour, with no costs.

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Issue for consideration

Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the expenditure incurred towards advertisement/business promotion in the form of MRF Pace Foundation is not an allowable deduction? +2 more

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Court's answer

Question 1 is answered in favour of the assessee: the Tribunal's position that expenditure towards advertisement/business promotion in the form of the MRF Pace Foundation is not an allowable deduction is rejected, the Court following its earlier decisions on identical facts.

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Ratio / Principle

Since the facts and legal position remain identical to the earlier years already considered by this Court (MRF v Deputy Commissioner of Income Tax, Central, 1128 taxmann.com 21 (Madras); MRF Ltd. v Deputy Commissioner of Income-Tax (LTU), 2173 taxmann.com 915 (Madras)), the Court follows the ratio of those decisions and answers all three admitted questions of law in favour of the assessee.

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Key takeaways

Question 2 is answered in favour of the assessee: expenditure incurred towards the MRF Pace Foundation, which has high advertisement value, is held allowable, the Court following its earlier decisions on identical facts.ratio¶¶43
Question 3 is answered in favour of the assessee: providing training through the MRF Pace Foundation is accepted as a mode of promoting and sponsoring sports by which the appellant's name and brand receives publicity, the expenditure being incurred in the course of business, the Court following its earlier decisions on identical facts.ratio¶¶43

Detailed headnote1 paragraphs

Madras High Court — Neutral Citation 2026:MHC:605; T.C.A.Nos. 925 & 926 of 2014; decided 28.01.2026; bench of Dr. Justice Anita Sumanth and Justice Mummineni Sudheer Kumar, common judgment delivered by Dr. Justice Anita Sumanth, J. M/s. MRF Ltd. (appellant-assessee) appealed under Section 260A of the Income-Tax Act, 1961 against the orders of the Income Tax Appellate Tribunal, Madras 'A' Bench dated 30.05.2014 in ITA No.520/Mds/2014 and ITA No.522/Mds/2014 (respondent: Joint Commissioner of Income Tax, Large Taxpayer Unit, Chennai) for AY 2009–10 and 2010–11. Three questions admitted on 08.12.2014 concerned whether expenditure on the MRF Pace Foundation — described as advertisement/business promotion having high advertisement value, the training of pace bowlers being a mode of promoting and sponsoring sports giving the appellant's name and brand publicity — was allowable. Holding the facts and legal position identical to its own earlier decisions in MRF v Deputy Commissioner of Income Tax, Central, 1128 taxmann.com 21 (Madras) (AY 2006–07 and 2007–08) and MRF Ltd. v Deputy Commissioner of Income-Tax (LTU), 2173 taxmann.com 915 (Madras) (AY 2003–04, 2005–06 and 2008–09), the Court followed the ratio of those decisions, answered all three questions in favour of the assessee and allowed both appeals with no costs. (Delhi Cloth and General Mills Co. Ltd. appears only within the quoted operative portion of the earlier decision.)

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2026:MHC:605

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T.C.A.Nos. 925 & 926 of 2014

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 28.01.2026

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CORAM :

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THE HONOURABLE DR.JUSTICE ANITA SUMANTH and THE HONOURABLE MR.JUSTICE MUMMINENI SUDHEER KUMAR

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T.C.A.Nos. 925 & 926 of 2014

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M/s. MRF Ltd., No.124, Greams Road, Chennai – 600 006.

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.. Appellant in both appeals

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The Joint commissioner of Income Tax Large Taxpayer Unit, Chennai – 600101.

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.. Respondent in both appeals

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Prayer in TCA No. 925 of 2014 : Appeal filed under Section 260A of the Income-Tax Act,1961 against the order of the Income Tax Appellate Tribunal, Madras ‘A’ Bench dated 30.05.2014 in ITA No.520/Mds/2014.

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Prayer in TCA No. 926 of 2014 : Appeal filed under Section 260A of the Income-Tax Act,1961 against the order of the Income Tax Appellate Tribunal, Madras ‘A’ Bench dated 30.05.2014 in ITA No.522/Mds/2014.

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(in both) For Appellant : Mr.R.Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan For Respondents : Mr.D.Prabhu Mukunth Arunkumar Senior Standing Counsel

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1/5

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https://www.mhc.tn.gov.in/judis

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T.C.A.Nos. 925 & 926 of 2014

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COMMON JUDGMENT

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(Delivered by Dr. ANITA SUMANTH, J.)

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These two assessee’s appeals relate to assessment years (AY) 2009

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– 10 and 2010 – 11 and have been admitted on 08.12.2014 on the

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following three questions of law:-

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“1.Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the expenditure incurred towards advertisement/business promotion in the form of MRF Pace Foundation is not an allowable deduction?

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2. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the expenditure incurred towards MRF Pace Foundation which has high advertisement value is not an allowable expenditure?

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3.Whether on the fact and in the circumstances of the case, the Tribunal failed to appreciate that providing training through MRF Pace Foundation is one mode of promoting and sponsoring sports by which the appellant’s name and brand has received enormous publicity and hence the expenditure for the same was incurred in the course of business?”

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The questions have been considered by this Court in the case of

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this assessee ( MRF v Deputy Commissioner of Income Tax , Central¹ (AY

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2006 – 07 and 2007 – 08)) and MRF Ltd., v Deputy Commissioner of

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1128 taxmann.com 21(Madras)

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2/5

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https://www.mhc.tn.gov.in/judis

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T.C.A.Nos. 925 & 926 of 2014 Income-Tax (LTU)² , (AY 2003 – 04, 2005 – 06 and 2008 – 09), and the

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operative portion reads as under:-

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“21.As already observed, the expenditure incurred by the assessee in the Pace Foundation cannot be regarded as a donation and it was never the case of the assessee, nor there was anything on record for the Assessing Officer to draw such a conclusion. Secondly, the assessee has been able to point out certain facts before the Assessing Officer as well as before the First Appellate Authority as to how the training of pace bowlers has helped them in a business activity. The contentions placed by the assessee have not been found to be false or baseless. In such circumstances, it is best for the Department to leave it to the assessee to take a decision as to what is best for them and for the health of the company. These aspects were rightly taken note of by the CIT(A) by observing that the assessee~company is able to get popularity because of its close association with the game of cricket and it is comparable to any other mode of advertisement establishing hoardings, publicity material and other conventional modes of advertisement.

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22.Further, the CIT(A) rightly took note of the decision in Delhi Cloth and General Mills Co. Ltd. (supra) by observing that the power of the Revenue is confined only to examine the purpose of genuineness of the expenditure and not the expediency or the quantum. Nowhere there is any observation either made by the Assessing Officer or the Tribunal that the expenditure was not genuine. In fact, Mr.T.Ravikumar would fairly submit that all other expenditure, which have been claimed by the assessee towards sponsorship, advertisement, have been allowed in its entirety. The Tribunal fell in error in coming to a conclusion that donations were extended towards the Pace Foundation, when the fact remains that the assessee has established the foundation and it is part and parcel of the assessee themselves and not a

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