Chainrup Sampatram v. CIT

24 ITR 481Supreme Court of India1953#475 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 366,005 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
Read the full judgment

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

Devidayal Aluminium Industries (P) Ltd., New Delhi vs. DCIT, Ghaziabad

ITA 4610/DEL/2016[2008-09]Status: DisposedITAT Delhi08 Jan 2025AY 2008-09

Bench: Shri Satbeer Singh Godara & Shri M. Balaganesh

Section 143(3)Section 147Section 2(47)Section 221(1)

…ir lordships made an arbitration reference to the hon’ble justice Mr. A.P. Shah (Retd. Chief Justice & arbitrator), which culminated in the award dated November 4, 2020 and therefore, even going by accrual principle, we quote Chainrup Sampatram Vs. CIT (1953) 24 ITR 481 (SC) that no income could be said to have accrued to assessee in absence of any reasonable certainty in view of ongoing litigations. Their lordships said landmark decision also draws a distinction qua an expenditure claim which could be booked at the first sign of reasonable probability. We observe in this peculiar factual backdrop that once the a…

Devidayal Aluminium Industries (P) Ltd., New Delhi vs. DCIT, Ghaziabad

ITA 4609/DEL/2016[2007-08]Status: DisposedITAT Delhi08 Jan 2025AY 2007-08

Bench: Shri Satbeer Singh Godara & Shri M. Balaganesh

Section 143(3)Section 147Section 2(47)Section 221(1)

…ir lordships made an arbitration reference to the hon’ble justice Mr. A.P. Shah (Retd. Chief Justice & arbitrator), which culminated in the award dated November 4, 2020 and therefore, even going by accrual principle, we quote Chainrup Sampatram Vs. CIT (1953) 24 ITR 481 (SC) that no income could be said to have accrued to assessee in absence of any reasonable certainty in view of ongoing litigations. Their lordships said landmark decision also draws a distinction qua an expenditure claim which could be booked at the first sign of reasonable probability. We observe in this peculiar factual backdrop that once the a…

Indian Overseas Bank, Chennai vs. ACIT, Ltu-2, Chennai

In the result, both the appeals filed by the assessee are allowed

ITA 1571/CHNY/2024[2017-18]Status: DisposedITAT Chennai18 Dec 2024AY 2017-18

Bench: Shri Manu Kumar Giri, Hon’Ble & Shri S. R. Raghunatha, Hon’Bleआयकर अपील सं./Ita Nos.: 1570 & 1571/Chny/2024 िनधा"रण वष" / Assessment Years: 2016-17 & 2017-18 Indian Overseas Bank, The Principal Commissioner Of 763, Anna Salai, V. Income Tax, Anna Road, Chennai -4, Chennai – 600 002. Chennai -600 034. [Pan: Aaaci-1223-J] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri. C. Naresh, Ca : Shri. Nilay Baran Som, Cit ""यथ" क" ओर से/Respondent By सुनवाई क" तारीख/Date Of Hearing : 25.09.2024 घोषणा क" तारीख/Date Of Pronouncement : 18.12.2024 आदेश /O R D E R Per S. R. Raghunatha:

For Appellant: Shri. C. Naresh, CA
Section 143(3)Section 147Section 148Section 263

…hat the translation gain which arises on account of revaluation of assets and liabilities of overseas branches is purely notional and unrealised gain. The assessee had relied on binding precedents of Hon'ble Supreme court in the cases of Chainnrup Sampathram (24 ITR 481) and Sanjeev Woollen Mills Ltd (279 ITR 434). The assessee in the books of accounts had credited the notional unrealised gain to Foreign Currency translation reserve as per the mandatory requirement of Accounting Standard (AS) -11. :-12-: ITA. Nos:1570 & 1571/Chny/2024 The Ld. PCIT by wrongly relying on the decision of Hon'ble Supreme Court in the…

Indian Overseas Bank, Chennai vs. DCIT, Ltu-2, Chennai

In the result, both the appeals filed by the assessee are allowed

ITA 1570/CHNY/2024[2016-17]Status: DisposedITAT Chennai18 Dec 2024AY 2016-17

Bench: Shri Manu Kumar Giri, Hon’Ble & Shri S. R. Raghunatha, Hon’Bleआयकर अपील सं./Ita Nos.: 1570 & 1571/Chny/2024 िनधा"रण वष" / Assessment Years: 2016-17 & 2017-18 Indian Overseas Bank, The Principal Commissioner Of 763, Anna Salai, V. Income Tax, Anna Road, Chennai -4, Chennai – 600 002. Chennai -600 034. [Pan: Aaaci-1223-J] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri. C. Naresh, Ca : Shri. Nilay Baran Som, Cit ""यथ" क" ओर से/Respondent By सुनवाई क" तारीख/Date Of Hearing : 25.09.2024 घोषणा क" तारीख/Date Of Pronouncement : 18.12.2024 आदेश /O R D E R Per S. R. Raghunatha:

For Appellant: Shri. C. Naresh, CA
Section 143(3)Section 147Section 148Section 263

…hat the translation gain which arises on account of revaluation of assets and liabilities of overseas branches is purely notional and unrealised gain. The assessee had relied on binding precedents of Hon'ble Supreme court in the cases of Chainnrup Sampathram (24 ITR 481) and Sanjeev Woollen Mills Ltd (279 ITR 434). The assessee in the books of accounts had credited the notional unrealised gain to Foreign Currency translation reserve as per the mandatory requirement of Accounting Standard (AS) -11. :-12-: ITA. Nos:1570 & 1571/Chny/2024 The Ld. PCIT by wrongly relying on the decision of Hon'ble Supreme Court in the…

Ajay Kumar Dua, New Delhi vs. PCIT Circle 61(1) - 12, New Delhi

Appeal is allowed

ITA 3359/DEL/2024[2012-13]Status: DisposedITAT Delhi16 Dec 2024AY 2012-13

Bench: Shri Satbeer Singh Godara & Shri M. Balaganeshassessment Year: 2012-13 Sh. Ajay Kumar Dua, Vs. Pcit, B-3, Defence Colony, Circle-61(1)-12, New Delhi New Delhi Pan :Aajpd3532B (Appellant) (Respondent) Assessee By Sh. Ved Jain, Advocate Sh. Ayush Garg, Ca Department By Mr. Javed Akhtar, Cit(Dr) Date Of Hearing 19.11.2024 Date Of Pronouncement 16.12.2024 Order

Section 143(2)Section 143(3)Section 147Section 263

…to the learned CIT(DR) to indicate as to how the assessee’s mere advances received in the impugned assessment year are taxable even going by the accrual principle till the time there is some reasonable certainty going by the Chainrup Sampatram Vs. CIT (1953) 24 ITR 481 (SC). We must also clarify that even the learned PCIT’s impugned revision discussion in para 9.4 does not dispute both these facts of the assessee having got assessed qua the very advances and also a doubt in his own mind that any other assessment year of taxability thereof would also be identified. We thus conclude in these peculiar facts that th…

Asstt. Commissioner of Income-Tax, Circle-5, Pune vs. Sangam Press Private Limited, Pune

Appeal is dismissed

ITA 674/PUN/2024[2017-18]Status: DisposedITAT Pune25 Oct 2024AY 2017-18

Bench: Shri R. K. Panda & Shri Satbeer Singh Godaraआयकर अपील सं. / Ita No.674/Pun/2024 िनधा"रण वष" / Assessment Year: 2017-18 Acit, Circle-5, Pune. Vs. Sangam Press Private Limited, 17-B, Sangam House, Sangam Press Road, Pune- 411038. Pan : Aaccs5995B Appellant Respondent Revenue By : Shri Ajay Kumar Keshari Assessee By Shri C. H. Naniwadekar : Date Of Hearing : 10.09.2024 Date Of Pronouncement : 25.10.2024 आदेश / Order Per Satbeer Singh Godara, Jm: This Revenue’S Appeal For Assessment Year 2017-18 Arises Against The Commissioner Of Income Tax (Appeals)-12, [In Short The “Cit(A)”] Pune’S Din & Order No.Itba/Apl/S/250/2023- 24/1060642739(1), Dated 08.02.2024, In Proceedings U/S 143(3) Of The Income Tax Act, 1961 (In Short “The Act”). Heard Both The Parties. Case File Perused.

For Respondent: Shri Ajay Kumar Keshari
Section 143(3)Section 43C

…(A)’s impugned findings deleting the impugned addition stand upheld. 7. The assessee’s remaining arguments inter alia quoting lack of reasonable certainty of the impugned advances for the purpose of revenue recognition as per Chainrup Sampatram vs/ CIT (1953) 24 ITR 481 (SC) and that it’s projects stood completed much later and the department has itself accepted the very book results in preceding and succeeding assessment years and the corresponding sale deed getting executed thereof, stand rendered academic once we have rejected the Revenue’s twin arguments in principle. 8. This Revenue’s appeal is dismissed. Or…

The ITO, Kochi vs. M/S.Reality Projects and Entertainments P. Ltd, Puducherry

Appeal is dismissed in above terms

ITA 116/COCH/2020[2014-15]Status: DisposedITAT Cochin23 Oct 2024AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singhito, Corporate Ward 2(2) Reality Projects & 5Th Floor, C.R. Building Entertainments Pvt. Ltd. Vs. I.S. Press Road, Kochi 682018 17, Kamaraj Salai [Pan: Aadcr1354A] Puducherry 605011 (Appellant) (Respondent)

For Appellant: ------ None ------For Respondent: Dr. S. Pandian, CIT-DR
Section 143(3)Section 2(47)(v)Section 226(3)Section 28Section 46ASection 53A

…We note in these facts merely such an advance amount; without actual transfer or possession of the land, could not be taxable as sec.28(1) business income, on mercantile basis, since lacking reasonable certainity, in light of Chainrup Sampatram vs. CIT [1953] 24 ITR 481 (SC) settling the law long back that no anticipated profits be treated as income unless the profits therefrom are realized. 5. All this is indeed coupled with the fact that although there is very serious issue between the parties as to whether the assessee’s impugned compensation is covered by the old Land Acquisition Act, 1894 giving by the date…

ACIT, Central Circle - 3 (3), Chennai vs. M/S Land Marvel Homes, Chennai

In the result, appeal filed by the Revenue is allowed

ITA 1055/CHNY/2022[2012-2013]Status: DisposedITAT Chennai26 Jul 2024AY 2012-2013

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. R. Raghunatha, Hon’Bleआयकरअपीलसं./Ita No.: 1055/Chny/2022 िनधा"रणवष" / Assessment Year: 2012-13 M/S. Land Marvel Homes, The Acit, V. 45-47, Old No. 22-23, Central Circle -3(3), 3Rd Floor, 1St Main Road, Chennai. Gandhi Nagar, Adyar, Chennai – 600 020. [Pan:Aabfl-4387-N] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ"क"ओरसे/Appellant By : Shri. V. Nandakumar, Cit ""यथ"क"ओरसे/Respondent By : Shri. T. Banusekar, Advocate & Shri. Yeshwanth Kumar, Ca सुनवाई क" तारीख/Date Of Hearing : 06.06.2024 घोषणा क" तारीख/Date Of Pronouncement : 26.07.2024 आदेश /O R D E R

For Appellant: Shri. V. Nandakumar, CITFor Respondent: Shri. T. Banusekar, Advocate &
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

…lf”. According to him, the process of revaluation of stock by itself cannot bring in any real profits and cited the decisions in the case of CIT v. K.A.R.K. Firm reported in [1934] 2 ITR 183, and also in the case of ChainrupSampatram v. CIT reported in [1953] 24 ITR 481 and also in the case of CIT v. Hind Construction Ltd., reported in [1972] 82 ITR 211 and he also submitted that it is well settled law that, what is taxable under the Income Tax Law is only a real income and cited the decision in the case of CIT v. M/s.Shoorji Vallabhdas& Co., reported in [1962] 46 ITR 144 and CIT v. Birla Gwalior (P) Ltd., report…

Income Tax Officer-10(2)(3), Aayakar Bhavan, Churchgate vs. Abdul Rahim Suleman Ghaswala, Jogeshwari

In the result, the appeals are dismissed

ITA 642/MUM/2024[2013-14]Status: DisposedITAT Mumbai29 May 2024AY 2013-14

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Bleincome Tax Officer-10(2)(3) V. Abdul Rahim Suleman Ghaswala 142/48, Ghaswala Estate Room No-212, Aayakar Bhavan S.V. Road, Jogeshwari(W) M.K. Road, Mumbai-400020 Mumbai – 400102 Pan: Aalpg9087A (Appellant) (Respondent) Assessee Represented By Shri S.M. Makhija & : Ms. Manisha Ghind Department Represented By : Shri Ajay Chandra

Section 148Section 45Section 45(3)Section 48

…in the books of the firm M/s. Salapuria Soft Zone is wholly without any basis. There was no under valuation of the land when it was held by the said firm as inventory. By relying to the decision of the Hon'ble Supreme Court in Chainrup Sampatram v. CIT [1953] 24 ITR 481, it was contended that for accounting purposes, the stock is valued at cost or market price whichever is lower and the market value is taken only when if falls below cost. Further it was submitted that the three companies paid Rs. 21,87,76,492/- for purchasing the said land which was more than two and half times the guideline value fixed by the Go…

Anil Bhutani, New Delhi vs. DCIT, Central Circle-1, Noida

In the result, the substantial question of law is answered in favour of the appellant and against the revenue

ITA 430/DEL/2020[2017-18]Status: DisposedITAT Delhi03 May 2024AY 2017-18

Bench: SHRI G. S. PANNU (Vice President), SHRI ANUBHAV SHARMA (Judicial Member)

Section 131Section 132(1)Section 132(4)Section 143(3)Section 69ASection 69C

…arly employed by the assessee, the Assessing Officer may make an assessment in the manner provided in Section 144.” 10. In support of the above findings this Court had placed reliance on the following decisions of the Apex Court. (1) Chainruy Sampatram v. CIT 24 ITR 481. Anil Bhutani vs. DCIT (2) Investment Ltd. v. CIT. 77 ITR 533 and (3) A.L.A. Firm v. CIT 189 ITR 285. 11. We may recapitulate the following observations of the hon'be Supreme Court in Investigation Ltd. (supra): “A taxpayer is free to employ for the purpose of his trade, his own method of keeping accounts, and for that purpose to value his stock-…

DCIT-41(4)(1), Mumbai vs. Abdulsattar Suleman Ghaswala, Mumbai

In the result appeal of learned Assessing officer for A

ITA 1658/MUM/2023[2013-14]Status: DisposedITAT Mumbai21 Dec 2023AY 2013-14

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Abdulsattar Suleman Dcit-41(4)(1) Ghaswala Room No. 425, 4Th Floor, Kautilya 142/48 Ghaswala Estate Bhavan, Bkc, Bandra(East) Vs. S V Road Jogeshwari(W) Mumbai-400051 Mumbai-400102 (Appellant) (Respondent) Pan No. Aalpg9088R Co No. 83/Mum/2023 (Arising In Ita No. 1658/Mum/2023 For A.Y. 2013-14) Abdulsattar Suleman Ghaswala Dcit-41(4)(1) Room No. 425, 4Th Floor, Kautilya 142/48 Ghaswala Estate S V Road Jogeshwari(W) Bhavan, Bkc, Bandra(East) Vs. Mumbai-400051 Mumbai-400102 (Cross Objector/ Appellant) (Respondent) Pan No. Aalpg9088R

For Appellant: Shri. K. ShivramFor Respondent: Shri. Ajay Chandran, DR
Section 143(3)Section 148

…in the books of the firm M/s. Salapuria Soft Zone is wholly without any basis. There was no under valuation of the land when it was held by the said firm as inventory. By relying to the decision of the Hon'ble Supreme Court in Chainrup Sampatram v. CIT [1953] 24 ITR 481, it was contended that for accounting purposes, the stock is valued at cost or market price whichever is lower and the market value is taken only when if falls below cost. Further it was submitted that the three companies paid Rs. 21,87,76,492/- for purchasing the said land which was more than two and half times the guideline value fixed by the Go…

DCIT Cir - 3(1), Mumbai vs. M/S. Bajaj Auto Ltd., Mumbai

In the result, the appeals filed by the assesse are partly allowed and the appeals filed by the revenue are dismissed

ITA 573/MUM/2007[2000-2001]Status: DisposedITAT Mumbai28 Nov 2023AY 2000-2001

Bench: Aby T Varkey & Shri Amarjit Singh

For Appellant: Ms. Vasanti Patel & Shri CharuFor Respondent: Shri. Krishna Bandi
Section 143(2)Section 143(3)

…4 (SC) and CIT Vs. Agrawal Enterprise 235 ITR 412 that real income can be ascertained on the basis of the real value of opening and closing stock. The ld. CIT(A) has also referred the decision of Hon’ble Supreme Court in the case of Sampath Ram Vs. CIT (1953) 24 ITR 481 (SC) and CIT Vs. Indo Nippon Chemicals Company Ltd. 164 CTR (Bom) 78 wherein it is held that closing inventory is to be adjusted by tax then a corresponding effect has to be given in the opening inventory too. P a g e | 26 ITA No. 2125 & 1399/Mum/2005 & ITA No. 3055 & 2655/Mum/2005 A.Y. 1999-2000 & 2000 -2001 Bajaj Auto Limited Therefore, the ld…

M/S. Bajaj Auto Ltd., Mumbai vs. The Dy CIT Cir 3(1), Mumbai

In the result, the appeals filed by the assesse are partly allowed and the appeals filed by the revenue are dismissed

ITA 3055/MUM/2005[2000-2001]Status: DisposedITAT Mumbai28 Nov 2023AY 2000-2001

Bench: Aby T Varkey & Shri Amarjit Singh

For Appellant: Ms. Vasanti Patel & Shri CharuFor Respondent: Shri. Krishna Bandi
Section 143(2)Section 143(3)

…4 (SC) and CIT Vs. Agrawal Enterprise 235 ITR 412 that real income can be ascertained on the basis of the real value of opening and closing stock. The ld. CIT(A) has also referred the decision of Hon’ble Supreme Court in the case of Sampath Ram Vs. CIT (1953) 24 ITR 481 (SC) and CIT Vs. Indo Nippon Chemicals Company Ltd. 164 CTR (Bom) 78 wherein it is held that closing inventory is to be adjusted by tax then a corresponding effect has to be given in the opening inventory too. P a g e | 26 ITA No. 2125 & 1399/Mum/2005 & ITA No. 3055 & 2655/Mum/2005 A.Y. 1999-2000 & 2000 -2001 Bajaj Auto Limited Therefore, the ld…

The DCIT 3(1), Mumbai vs. M/S. Bajajaj Auto Ltd., Mumbai

In the result, the appeals filed by the assesse are partly allowed and the appeals filed by the revenue are dismissed

ITA 2655/MUM/2005[2000-2001]Status: DisposedITAT Mumbai28 Nov 2023AY 2000-2001

Bench: Aby T Varkey & Shri Amarjit Singh

For Appellant: Ms. Vasanti Patel & Shri CharuFor Respondent: Shri. Krishna Bandi
Section 143(2)Section 143(3)

…4 (SC) and CIT Vs. Agrawal Enterprise 235 ITR 412 that real income can be ascertained on the basis of the real value of opening and closing stock. The ld. CIT(A) has also referred the decision of Hon’ble Supreme Court in the case of Sampath Ram Vs. CIT (1953) 24 ITR 481 (SC) and CIT Vs. Indo Nippon Chemicals Company Ltd. 164 CTR (Bom) 78 wherein it is held that closing inventory is to be adjusted by tax then a corresponding effect has to be given in the opening inventory too. P a g e | 26 ITA No. 2125 & 1399/Mum/2005 & ITA No. 3055 & 2655/Mum/2005 A.Y. 1999-2000 & 2000 -2001 Bajaj Auto Limited Therefore, the ld…

M/S. Bajaj Auto Ltd., Mumbai vs. The Dy CIT RG 3(1), Mumbai

In the result, the appeals filed by the assesse are partly allowed and the appeals filed by the revenue are dismissed

ITA 2125/MUM/2005[1999-2000]Status: DisposedITAT Mumbai28 Nov 2023AY 1999-2000

Bench: Aby T Varkey & Shri Amarjit Singh

For Appellant: Ms. Vasanti Patel & Shri CharuFor Respondent: Shri. Krishna Bandi
Section 143(2)Section 143(3)

…4 (SC) and CIT Vs. Agrawal Enterprise 235 ITR 412 that real income can be ascertained on the basis of the real value of opening and closing stock. The ld. CIT(A) has also referred the decision of Hon’ble Supreme Court in the case of Sampath Ram Vs. CIT (1953) 24 ITR 481 (SC) and CIT Vs. Indo Nippon Chemicals Company Ltd. 164 CTR (Bom) 78 wherein it is held that closing inventory is to be adjusted by tax then a corresponding effect has to be given in the opening inventory too. P a g e | 26 ITA No. 2125 & 1399/Mum/2005 & ITA No. 3055 & 2655/Mum/2005 A.Y. 1999-2000 & 2000 -2001 Bajaj Auto Limited Therefore, the ld…

The Dy CIT RG 3(1), Mumbai vs. M/S. Bajaj Auto Ltd, Mumbai

In the result, the appeals filed by the assesse are partly allowed and the appeals filed by the revenue are dismissed

ITA 1933/MUM/2005[1999-2000]Status: DisposedITAT Mumbai28 Nov 2023AY 1999-2000

Bench: Aby T Varkey & Shri Amarjit Singh

For Appellant: Ms. Vasanti Patel & Shri CharuFor Respondent: Shri. Krishna Bandi
Section 143(2)Section 143(3)

…4 (SC) and CIT Vs. Agrawal Enterprise 235 ITR 412 that real income can be ascertained on the basis of the real value of opening and closing stock. The ld. CIT(A) has also referred the decision of Hon’ble Supreme Court in the case of Sampath Ram Vs. CIT (1953) 24 ITR 481 (SC) and CIT Vs. Indo Nippon Chemicals Company Ltd. 164 CTR (Bom) 78 wherein it is held that closing inventory is to be adjusted by tax then a corresponding effect has to be given in the opening inventory too. P a g e | 26 ITA No. 2125 & 1399/Mum/2005 & ITA No. 3055 & 2655/Mum/2005 A.Y. 1999-2000 & 2000 -2001 Bajaj Auto Limited Therefore, the ld…

Milestone Dewellers Pvt. Ltd., Jaipur vs. ITO Ward 6(2), Jaipur

In the result, appeal of the assessee is allowed

ITA 565/JPR/2023[2017-18]Status: DisposedITAT Jaipur31 Oct 2023AY 2017-18

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Manish Agarwal (C.A.)For Respondent: Shri Arvind Kumar (CIT) a
Section 143(3)Section 144BSection 147

…te Bank of Travancore Vs. CIT 158 ITR 102 (SC) There can be no dispute with regard to the principle that if the stock in trade remained unserved or unsold, the mere book appreciation in value thereof cannot be brought to tax. Chainrup Sampatram Vs CIT [1953] 24 ITR 481 (SC) Though loss due to a fall in price below cost is allowed even if such loss has not been actually realized, no question of charging the appreciated value of closing stock as ‘notional profits’ can arise. It is a misconception to think that any profit ‘arises out of the valuation of closing stock’ and the situs of its arising or accrual is wher…

Concentrix Services India Private Limited (Formerly Known As Minacs Private Limited, Minacs Limited & Adity Birla Minacs Worldwide Limited ), Mumbai vs. Joint Commissioner of It (OSD)10(2)(2)Assistant Commissioner of Income Tax-9(2)(2), Mumbai

ITA 5764/MUM/2017[2012-13]Status: DisposedITAT Mumbai18 Oct 2023AY 2012-13
For Appellant: Shri Yogesh TharFor Respondent: Shri Ajit Pal Singh Daia
Section 143(3)Section 144C(3)Section 92(1)Section 92B

…there is a dichotomy in accounting approach but then this is what is the sound accounting policy and it has the sanction of law. As a matter of fact, it is this principle, as recognized by Hon‟ble Supreme Court in the case of Chainrup Sampatram Vs CIT [(1953) 24 ITR 481 (SC)], which explains the valuation of closing stock on market price or cost price whichever is less. There is thus, in principle, no difficulty is seeking a deduction in respect of a reasonably anticipated loss, even though it may not have actually fructified, in computation of profits and gains of business. To this extent, the Assessing Officer…

Concentrix Services India Private Limited (Formerly Known As Minacs Private Limited, Minacs Limited & Adity Birla Minacs Worldwide Limited ), Mumbai vs. Deputy Commissioner of Income Tax-10(2)(2), Mumbai

ITA 5260/MUM/2017[2011-12]Status: DisposedITAT Mumbai18 Oct 2023AY 2011-12
For Appellant: Shri Yogesh TharFor Respondent: Shri Ajit Pal Singh Daia
Section 143(3)Section 144C(3)Section 92(1)Section 92B

…there is a dichotomy in accounting approach but then this is what is the sound accounting policy and it has the sanction of law. As a matter of fact, it is this principle, as recognized by Hon‟ble Supreme Court in the case of Chainrup Sampatram Vs CIT [(1953) 24 ITR 481 (SC)], which explains the valuation of closing stock on market price or cost price whichever is less. There is thus, in principle, no difficulty is seeking a deduction in respect of a reasonably anticipated loss, even though it may not have actually fructified, in computation of profits and gains of business. To this extent, the Assessing Officer…

Vasant Haribhau Gaikwad, Pune vs. Income-Tax Officer, Ward - 13(5), Pune

Appeal is partly allowed in above terms

ITA 553/PUN/2018[2013-14]Status: DisposedITAT Pune13 Oct 2023AY 2013-14

Bench: Shri Satbeer Singh Godara & Dr. Dipak P. Ripote

For Appellant: Shri Kishor PhadkeFor Respondent: Shri M.G. Jasnani
Section 143(3)

…Act which is not applicable once “business head” has come into play as per the CIT(A)'s directions. 12. So far as the Revenue’s instant “accrual” principle is concerned, we quote hon’ble apex court’s land mark decision in Chainrup Sampath Ram vs. CIT [1953] 24 ITR 481 (SC) that an income could be said to have accrued by the principles of reasonable “certainty” only than reasonable “probability” as is applicable in case of anticipation of expenditure/losses. We thus accept the assessee’s arguments regarding the instant second substantive issue that both the learned lower authorities have erred in law and on fact…