Chainrup Sampatram v. CIT

State Bank of India, Mumbai vs. DCIT Cir 2(2), Mumbai

Bench: Shri M. Balaganesh & Shri Kuldip Singhassessment Year: 2005-06 M/S. State Bank Of India, Dcit, Financial Reporting & Circle -2(2), Taxation Dept., Mumbai 3Rd Floor, Vs. Corporate Centre, Madam Cama Road, Nariman Point, Mumbai – 400 021 Pan: Aaacs8577K (Appellant) (Respondent) Assessment Year: 2005-06 Office Of The Dcit-2(2), M/S. State Bank Of India, R.No.545, Central Office, Aayakar Bhavan, Accounts & Compliance M.K. Road, Dept., Vs. 14Th Floor, Mumbai- 400 020 Madam Cama Rd., Nariman Point, Mumbai – 400 021 Pan: Aaacs8577K (Appellant) (Respondent)

…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 judgement 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 t…

Suprerior Financial Consultancy Services P.Ltd, Mumbai vs. Asst CIT 1(3), Mumbai

In the result, appeals filed by the assessee are allowed and appeal filed by the revenue is dismissed

Bench: Shri Laliet Kumar, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble&

…passes an accounting entry in his books of account essentially a unilateral act there is no ‘transaction’ that could give rise to any income as such. In this context, reliance is placed on the following judgments: (a) In CIT vs. Hind Construction Ltd. [1972] 83 ITR 211 (SC), it was held that no one can sell his goods to himself. A sale contemplates a sale and a purchaser. If a person revalues his goods and shows a higher value for them in his books, he cannot be considered as having sold these goods and made profits therefrom, (b) In Sir Kikabhai Premchand vs. CIT [1954] 24 ITR 506 (SC), the principle that ‘a ma…

Mumbai District Central Co-Op Bank Ltd., Mumbai vs. ITO 1 (3)(1), Mumbai

In the result, the appeal is allowed in the terms indicated above

…it cannot even be in serious doubt as to whether the loss of in account of valuation of stock can indeed be allowed as a deduction in computation of business income. Right from Hon’ble Supreme Court’s landmark judgment in the case of ChainrupSampatram vs. CIT 24 ITR 481 the law is very well settled, duly recognizing the principle of conservatism embedded in the accountancy practices, that if there is any anticipated loss, whether crystallizedor not the same is to be allowed as the deduction while anticipated profits are not be taken in to account for this purpose. Whether the loss is crystallized or notas long as…

State Bank of India, Mumbai vs. Asst CIT Cir 2(2), Mumbai

In the result, appeal of the Revenue in ITA No

…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 judgement 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…

Assistant Commissioner of Income Tax-5(2)(1), Mumbai vs. M/S. Jnj Holdings Pvt. Ltd, Mumbai

Bench: Shri S. Rifaur Rahman () & Shri Ravish Sood () & Asst. Commissioner Of M/S Jnj Holdings Pvt. Income Tax, Vs. Ltd,Raval Building No.1, Circle 5(2)(1), R. No. 525, 2Nd Floor, 428, Aayakar Bhavan, Bhadkamkar Marg, M.K. Road, Mumbai – 400 004 Mumbai – 400 020 Pan No.Aaacj2047D (Revenue) (Assessee)

…k‟ could not be dissected and would form part of the assessee‟s business of purchases and sale of shares. In support of his aforesaid conviction the A.O took support of the judgment of the Hon'ble Supreme court in the case of Chairrup Sampatram Vs. CIT (1953) 24 ITR 481 (SC). It was further observed by the A.O that the valuation of the „closing stock‟ at less than the cost by the assessee cannot be said to be a loss that had arisen from the valuation of the „closing stock‟, but in fact was a part and parcel of the loss of its business of purchase and sale of shares. It was observed by the A.O that the valuation o…

Assistant Commissioner of Income Tax-5(2)(1), Mumbai vs. M/S. Jnj Holdings Pvt. Ltd, Mumbai

Bench: Shri S. Rifaur Rahman () & Shri Ravish Sood () & Asst. Commissioner Of M/S Jnj Holdings Pvt. Income Tax, Vs. Ltd,Raval Building No.1, Circle 5(2)(1), R. No. 525, 2Nd Floor, 428, Aayakar Bhavan, Bhadkamkar Marg, M.K. Road, Mumbai – 400 004 Mumbai – 400 020 Pan No.Aaacj2047D (Revenue) (Assessee)

…k‟ could not be dissected and would form part of the assessee‟s business of purchases and sale of shares. In support of his aforesaid conviction the A.O took support of the judgment of the Hon'ble Supreme court in the case of Chairrup Sampatram Vs. CIT (1953) 24 ITR 481 (SC). It was further observed by the A.O that the valuation of the „closing stock‟ at less than the cost by the assessee cannot be said to be a loss that had arisen from the valuation of the „closing stock‟, but in fact was a part and parcel of the loss of its business of purchase and sale of shares. It was observed by the A.O that the valuation o…