Chainrup Sampatram v. CIT

24 ITR 481Supreme Court of India1953#470 most cited

What is Chainrup Sampatram v. CIT authority for?

Income accrues and becomes taxable only when there is a reasonable certainty of its realization. A mere possibility or expectation of income, particularly when subject to ongoing disputes, is not enough for it to be considered accrued.

196

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2005 to 2026.

Also referred to as

Chainrup Sampatram v. CIT · 24 ITR 481 · income accrual · reasonable certainty · taxable income · notional income · mercantile system of accounting · Section 145 · Section 143(3) · ongoing litigation · income recognition

Sections most often in play

Section 143(3)Section 153ASection 271(1)(c)Section 154Section 69Section 143(1)Section 147Section 148

Issues it is cited on

mercantile system of accountingadvance taxcommercial expediencysection 145revenue expenditurecapital expendituresection 37(1)scrutiny assessmentsection 28section 36previous yearsection 10

Judgments citing Chainrup Sampatram v. CIT

ASST CIT 2(2)(1), MUMBAI vs. STATE BANK OF INDIA, MUMBAI

In the result appeal filed by the assessee as well as revenue stands partly allowed for statistical purposes

ITA 3882/MUM/2017[2010-11]Status: DisposedITAT Mumbai21 Apr 2026AY 2010-11

Bench: Smt. Beena Pillai () & Shri Jagadish ()

Section 14ASection 36(1)Section 36(1)(vii)Section 36(1)(viia)Section 43B

…s contended by the assessee that it is a well settled principle of law that unrealised gains on stock are not to be brought to the tax net. Reliance in this regard is placed on the decision of the Supreme Court in the case of Chainrup Sampatram vs. CIT [1953] 24 ITR 481 (SC), wherein it is held that profit cannot “arise out of the valuation of the closing stock”. The relevant extract of the judgment of the Supreme Court is reproduced below: “While we agree with the conclusion that no part of the profits of the firm in the accounting year can be said to have accrued or arisen at Bikaner, the reasoning by which th…

STATE BANK OF INDIA,MUMBAI vs. ASST CIT CIR 2(2), MUMBAI

In the result appeal filed by the assessee as well as revenue stands partly allowed for statistical purposes

ITA 3680/MUM/2017[2010-11]Status: DisposedITAT Mumbai21 Apr 2026AY 2010-11

Bench: Smt. Beena Pillai () & Shri Jagadish ()

Section 14ASection 36(1)Section 36(1)(vii)Section 36(1)(viia)Section 43B

…s contended by the assessee that it is a well settled principle of law that unrealised gains on stock are not to be brought to the tax net. Reliance in this regard is placed on the decision of the Supreme Court in the case of Chainrup Sampatram vs. CIT [1953] 24 ITR 481 (SC), wherein it is held that profit cannot “arise out of the valuation of the closing stock”. The relevant extract of the judgment of the Supreme Court is reproduced below: “While we agree with the conclusion that no part of the profits of the firm in the accounting year can be said to have accrued or arisen at Bikaner, the reasoning by which th…

SHRIRAM FIANCE LTD.,CHENNAI vs. DCIT, CORPORATE CIRCLE-3(1), CHENNAI

In the result, the appeal filed by the assessee is partly-allowed

ITA 2635/CHNY/2025[2014-15]Status: DisposedITAT Chennai05 Feb 2026AY 2014-15

Bench: Shri George George K & Shri Inturi Rama Raoआयकर अपील सं./Ita No.: 2635/Chny/2025 िनधा"रण वष"/Assessment Year: 2014-15 Shriram Finance Limited, The Deputy Commissioner (Since Shriram City Union Finance Vs. Of Income Tax, Limited Amalgamated With Corporate Circle 3(1), Shriram Transport Finance Co. Chennai. Ltd. & Presently Known As Shriram Finance Ltd.,) Sri Towers, Plot No.14A, South Phase, Industrial Estate, Guindy, Chennai – 600 032. Pan: Aaacs 7703H (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri R. Sivaraman, Advocate ""यथ" क" ओर से/Respondent By : Ms. Gouthami Manivasagam, Addl.Cit सुनवाई क" तारीख/Date Of Hearing : 04.02.2026 घोषणा क" तारीख/Date Of Pronouncement : 05.02.2026

For Appellant: Shri R. Sivaraman, AdvocateFor Respondent: Ms. Gouthami Manivasagam
Section 143(3)Section 148Section 250

…t and the assessees came forward with the theory that the said investments are stock-in-trade, only for claiming deduction. However, the CIT(A) following the decisions of the Hon’ble Supreme Court in UCO Bank v. CIT [240 ITR 355] and Chainrup Sampathram case [24 ITR 481] as well as the earlier orders of the Tribunal dated 16.12.2010 in ITA.No.725/Mds/2010 and dated 10.10.2011 in ITA No.320/Mds/2011 CO.52/Mds/2011 relating to the respective assessment years 2006-07 and 2007-08, deleted the disallowances made by the assessing officer, by holding that the loss arising on sale of Government securities is business los…

ACIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

ITA 6541/DEL/2017[2011-12]Status: DisposedITAT Delhi20 Nov 2025AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 153ASection 154Section 271(1)(c)Section 69

…g any such accrual of notional interest income in the assessee’s hands carrying reasonable certainty element so as to be taxable in his hands going by their lordships’ landmark decision in Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal. (1953) 24 ITR 481 (SC). 5. Faced with this situation, we are of the considered view that the Revenue’s instant sole substantive grievance that we ought to revive the impugned ad-hoc/notional interest income @ 4% hardly carries any merit since not based on any supportive material on 4 | P a g e ITA Nos.6516 to 6521/Del/2017 & 6539 to 6541/Del/2017 record. We thus…

DCIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

ITA 6540/DEL/2017[2010-11]Status: DisposedITAT Delhi20 Nov 2025AY 2010-11

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 153ASection 154Section 271(1)(c)Section 69

…g any such accrual of notional interest income in the assessee’s hands carrying reasonable certainty element so as to be taxable in his hands going by their lordships’ landmark decision in Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal. (1953) 24 ITR 481 (SC). 5. Faced with this situation, we are of the considered view that the Revenue’s instant sole substantive grievance that we ought to revive the impugned ad-hoc/notional interest income @ 4% hardly carries any merit since not based on any supportive material on 4 | P a g e ITA Nos.6516 to 6521/Del/2017 & 6539 to 6541/Del/2017 record. We thus…

DCIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

ITA 6539/DEL/2017[2009-10]Status: DisposedITAT Delhi20 Nov 2025AY 2009-10

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 153ASection 154Section 271(1)(c)Section 69

…g any such accrual of notional interest income in the assessee’s hands carrying reasonable certainty element so as to be taxable in his hands going by their lordships’ landmark decision in Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal. (1953) 24 ITR 481 (SC). 5. Faced with this situation, we are of the considered view that the Revenue’s instant sole substantive grievance that we ought to revive the impugned ad-hoc/notional interest income @ 4% hardly carries any merit since not based on any supportive material on 4 | P a g e ITA Nos.6516 to 6521/Del/2017 & 6539 to 6541/Del/2017 record. We thus…

DCIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

ITA 6521/DEL/2017[2011-12]Status: DisposedITAT Delhi20 Nov 2025AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 153ASection 154Section 271(1)(c)Section 69

…g any such accrual of notional interest income in the assessee’s hands carrying reasonable certainty element so as to be taxable in his hands going by their lordships’ landmark decision in Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal. (1953) 24 ITR 481 (SC). 5. Faced with this situation, we are of the considered view that the Revenue’s instant sole substantive grievance that we ought to revive the impugned ad-hoc/notional interest income @ 4% hardly carries any merit since not based on any supportive material on 4 | P a g e ITA Nos.6516 to 6521/Del/2017 & 6539 to 6541/Del/2017 record. We thus…

DCIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

ITA 6520/DEL/2017[2010-11]Status: DisposedITAT Delhi20 Nov 2025AY 2010-11

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 153ASection 154Section 271(1)(c)Section 69

…g any such accrual of notional interest income in the assessee’s hands carrying reasonable certainty element so as to be taxable in his hands going by their lordships’ landmark decision in Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal. (1953) 24 ITR 481 (SC). 5. Faced with this situation, we are of the considered view that the Revenue’s instant sole substantive grievance that we ought to revive the impugned ad-hoc/notional interest income @ 4% hardly carries any merit since not based on any supportive material on 4 | P a g e ITA Nos.6516 to 6521/Del/2017 & 6539 to 6541/Del/2017 record. We thus…

DCIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

ITA 6519/DEL/2017[2009-10]Status: DisposedITAT Delhi20 Nov 2025AY 2009-10

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 153ASection 154Section 271(1)(c)Section 69

…g any such accrual of notional interest income in the assessee’s hands carrying reasonable certainty element so as to be taxable in his hands going by their lordships’ landmark decision in Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal. (1953) 24 ITR 481 (SC). 5. Faced with this situation, we are of the considered view that the Revenue’s instant sole substantive grievance that we ought to revive the impugned ad-hoc/notional interest income @ 4% hardly carries any merit since not based on any supportive material on 4 | P a g e ITA Nos.6516 to 6521/Del/2017 & 6539 to 6541/Del/2017 record. We thus…

DCIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

ITA 6518/DEL/2017[2008-09]Status: DisposedITAT Delhi20 Nov 2025AY 2008-09

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 153ASection 154Section 271(1)(c)Section 69

…g any such accrual of notional interest income in the assessee’s hands carrying reasonable certainty element so as to be taxable in his hands going by their lordships’ landmark decision in Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal. (1953) 24 ITR 481 (SC). 5. Faced with this situation, we are of the considered view that the Revenue’s instant sole substantive grievance that we ought to revive the impugned ad-hoc/notional interest income @ 4% hardly carries any merit since not based on any supportive material on 4 | P a g e ITA Nos.6516 to 6521/Del/2017 & 6539 to 6541/Del/2017 record. We thus…

DCIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

ITA 6517/DEL/2017[2007-08]Status: DisposedITAT Delhi20 Nov 2025AY 2007-08

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 153ASection 154Section 271(1)(c)Section 69

…g any such accrual of notional interest income in the assessee’s hands carrying reasonable certainty element so as to be taxable in his hands going by their lordships’ landmark decision in Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal. (1953) 24 ITR 481 (SC). 5. Faced with this situation, we are of the considered view that the Revenue’s instant sole substantive grievance that we ought to revive the impugned ad-hoc/notional interest income @ 4% hardly carries any merit since not based on any supportive material on 4 | P a g e ITA Nos.6516 to 6521/Del/2017 & 6539 to 6541/Del/2017 record. We thus…

DCIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

ITA 6516/DEL/2017[2006-07]Status: DisposedITAT Delhi20 Nov 2025AY 2006-07

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahman

Section 153ASection 154Section 271(1)(c)Section 69

…g any such accrual of notional interest income in the assessee’s hands carrying reasonable certainty element so as to be taxable in his hands going by their lordships’ landmark decision in Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal. (1953) 24 ITR 481 (SC). 5. Faced with this situation, we are of the considered view that the Revenue’s instant sole substantive grievance that we ought to revive the impugned ad-hoc/notional interest income @ 4% hardly carries any merit since not based on any supportive material on 4 | P a g e ITA Nos.6516 to 6521/Del/2017 & 6539 to 6541/Del/2017 record. We thus…

JCIT(OSD) CENTRAL CIRCLE 1, JHANDEWALAN vs. SAHARA INDIA REAL ESTATE CORPORATION LTD., LUCKNOW

ITA 1085/DEL/2024[2017-18]Status: DisposedITAT Delhi07 Oct 2025AY 2017-18

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman

For Appellant: Sh. Ajay Vohra, Sr. Adv. &For Respondent: Sh. Mahesh Kumar, CIT-DR
Section 143(3)

…e Assessing Officer. That being the case, we are of the considered view that the assessee was very well justified in booking it’s impugned loss as an allowable deduction at the first sign of reasonable probability in light of Chainrup Sampatram vs. CIT (1953) 24 ITR 481 (SC) holding as under: “.........The true purpose of crediting the value of unsold stock is to balance the cost of those goods entered on the other side of the account at the time of their purchase, so that the cancelling out of the entries relating to the same stock from both sides of the account would leave only the transactions on which there…

PR. COMMISSIONER OF INCOME TAX, NOIDA vs. TRIVENI ENGINEERING AND INDUSTRIES LTD

ITA/303/2025HC Delhi03 Sept 2025

Bench: Hon ’Ble Supreme Court? Iii. Whether On The Facts & Circumstances Of The Case, The Ld.

Section 260A

…ue herein is very much pending before their lordships for final adjudication, it would indeed be pre mature for us to apply “accrual” principle at this stage for lack of any reasonable certainty in recognition of revenue as per Chainrup Sampatram v. CIT(1953) 24 ITR 481 (SC). Their lordships have categorically held that a revenue Signed By:PRADEEP SHARMA Signing Date:15.09.2025 11:07:08 Signature Not Verified ITA 303/2025 Page 4 of 10 receipt could be recognized as an income only in case there arise a reasonable certainty thereof. We reiterate that the Revenue’s clear cut case is that the same has indeed been n…

CHANDRA BROS.,KOLKATA vs. I.T.O., WARD - 37(1), KOLKATA, KOLKATA

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 1572/KOL/2024[2022-2023]Status: DisposedITAT Kolkata22 Jul 2025AY 2022-2023

Bench: Sri Pradip Kumar Choubey & Sri Rakesh Mishra

Section 143(1)Section 145(2)Section 250Section 44A

…nnot make a profit out of itself: vide Kikabhai Premchand vs. CIT (1953) 24 ITR 506 (SC). (ii) The process of revaluation of stock by itself cannot bring in any real profits: vide CIT vs. K.A.R.K. Firm (1934)2 ITR 183 (Rang); Chainrup Sampatram vs. CIT (1953) 24 ITR 481 (SC) and CIT vs. Hind Construction Ltd. 1974 CTR (SC) 157: (1972) 83 ITR 211 (SC); and iii) It is well settled that what is taxable under the income-tax law is only real income vide CIT vs. Shoorji Vallabhdas and Co. (1962) 46 ITR 144 (SC) and CIT vs. Birla Gwalior (P) Ltd. 1973 CTR (SC) 349: (1973) 89 ITR 266 (SC). There is, therefore, no princip…

M/S. LALITHA JEWELLERY MART LTD.,CHENNAI vs. DCIT, CENTRAL CIRCLE-1(4), CHENNAI

In the result, all the appeals of the assessee are partly allowed

ITA 679/CHNY/2025[2020-21]Status: DisposedITAT Chennai12 Jun 2025AY 2020-21

Bench: Shri Aby T. Varkey & Shrimanoj Kumar Aggarwal

For Appellant: Mr. D. Anand, AdvocateFor Respondent: Mr. Shiva Srinivas, CIT
Section 132Section 153A

…juncture, it is also r At this juncture, it is also relevant to take note of the findings elevant to take note of the findings rendered by the Hon’ble Apex Court rendered by the Hon’ble Apex Court in the case of Chainrup Sampatram Chainrup Sampatram v. CIT (24 ITR 481) wherein it was held that, the valuation of the valuation of closing v. CIT (24 ITR 481) stock should not be treated as a source of profits. stock should not be treated as a source of profits. The Court observed The Court observed that the valuation of closing stock is based on the ‘principle of aluation of closing stock is based on the ‘princip…

M/S. LALITHA JEWELLERY MART LTD.,CHENNAI vs. DCIT, CENTRAL CIRCLE-1(4), CHENNAI

In the result, all the appeals of the assessee are partly allowed

ITA 678/CHNY/2025[2019-20]Status: DisposedITAT Chennai12 Jun 2025AY 2019-20

Bench: Shri Aby T. Varkey & Shrimanoj Kumar Aggarwal

For Appellant: Mr. D. Anand, AdvocateFor Respondent: Mr. Shiva Srinivas, CIT
Section 132Section 153A

…juncture, it is also r At this juncture, it is also relevant to take note of the findings elevant to take note of the findings rendered by the Hon’ble Apex Court rendered by the Hon’ble Apex Court in the case of Chainrup Sampatram Chainrup Sampatram v. CIT (24 ITR 481) wherein it was held that, the valuation of the valuation of closing v. CIT (24 ITR 481) stock should not be treated as a source of profits. stock should not be treated as a source of profits. The Court observed The Court observed that the valuation of closing stock is based on the ‘principle of aluation of closing stock is based on the ‘princip…

M/S. LALITHA JEWELLERY MART LTD.,CHENNAI vs. DCIT, CENTRAL CIRCLE-1(4), CHENNAI

In the result, all the appeals of the assessee are partly allowed

ITA 677/CHNY/2025[2018-19]Status: DisposedITAT Chennai12 Jun 2025AY 2018-19

Bench: Shri Aby T. Varkey & Shrimanoj Kumar Aggarwal

For Appellant: Mr. D. Anand, AdvocateFor Respondent: Mr. Shiva Srinivas, CIT
Section 132Section 153A

…juncture, it is also r At this juncture, it is also relevant to take note of the findings elevant to take note of the findings rendered by the Hon’ble Apex Court rendered by the Hon’ble Apex Court in the case of Chainrup Sampatram Chainrup Sampatram v. CIT (24 ITR 481) wherein it was held that, the valuation of the valuation of closing v. CIT (24 ITR 481) stock should not be treated as a source of profits. stock should not be treated as a source of profits. The Court observed The Court observed that the valuation of closing stock is based on the ‘principle of aluation of closing stock is based on the ‘princip…

ACIT, C. R. BUILDING vs. HANSDEEP INDUSTRIES AND TRADING COMPANY LTD., FOURTH FLOOR, LINK HOUSE,

In the result, the appeal is allowed

ITA 3466/DEL/2023[2016-17]Status: DisposedITAT Delhi28 May 2025AY 2016-17

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwalassessment Year: 2016-17 Vs. M/S. Acit, Hansdeep Industries C.R. Building & Trading Company Ltd., New Delhi 4Th Floor, Link House, 3 Bahadur Shah Zafar Marg, New Delhi Pan: Aabcj0776A (Appellant) (Respondent) Assessee By Sh. Ankit Kumar, Adv. Sh. Lalit Mohan, Ca Department By Sh. Rajesh Kumar Dhanesta, Sr. Dr Date Of Hearing 28.05.2025 Date Of Pronouncement 28.05.2025 Order

Section 143(3)Section 5Section 57

…(1)(vii) of the Act in such an instance involving the alleged diversion of interest-bearing funds for non-business purposes which has nowhere been invoked by the Assessing Officer. 5. Faced with the situation, we hereby quote Chainrup Sampatram Vs. CIT (1953) 24 ITR 481 (SC) that no income could be held to have been accrued or arise in assessee’s case in absence 5 | P a g e of any reasonable certainty as is sought to be projected at the department’s behest before us. We thus find no reason to interfere with the CIT(A)’s detailed lower appellate discussion deleting the notional interest income addition of Rs.5,76…

BANK OF MAHARASHTRA ,PUNE vs. ASST COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE, PUNE

In the result, the appeal filed by the Revenue is partly allowed for statistical purposes and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 259/PUN/2024[2016-17]Status: DisposedITAT Pune15 Jan 2025AY 2016-17

Bench: Shri R. K. Panda & Shri Vinay Bhamoreassessment Year : 2016-17

For Appellant: Shri S Ananthan & Smt. Abarna CAFor Respondent: Shri Amol Khairnar CIT-DR
Section 115JSection 143(1)Section 143(2)Section 143(3)Section 14ASection 36(1)(via)Section 36(1)(viia)

…which can be drawn is that for the purposes of valuation of the closing stock it is permissible for the assessee to value it at the cost or market value, whichever is lower. In-fact, the Hon‟ble Supreme Court in the case of Chainrup Sampatram vs. CIT, (1953) 24 ITR 481 (SC) held that the assessee is entitled to value the closing stock either at cost price or market value, whichever is lower. In the present case, Revenue does not dispute that the method of the valuation adopted by the assessee, namely, valuing the stock either at cost price or market value whichever is lower, is a generally accepted method of val…

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