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 366,314 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

The Akola Urban Co. Op. Bank Ltd., Akola vs. Dy. CIT- Akola Circle, Akola

In the result, both the appeals of assessee are allowed for statistical purpose

ITA 91/NAG/2015[2010-11]Status: DisposedITAT Nagpur14 May 2019AY 2010-11

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm

For Appellant: S/Shri C.J. Thakar & S.C. ThakarFor Respondent: Shri U.U. Kasar

…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…

The Akola Urban Co Op. Bank Ltd, Akola vs. D.C.I.T. Akola Cricle, Akola

In the result, both the appeals of assessee are allowed for statistical purpose

ITA 248/NAG/2015[2011-12]Status: DisposedITAT Nagpur14 May 2019AY 2011-12

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm

For Appellant: S/Shri C.J. Thakar & S.C. ThakarFor Respondent: Shri U.U. Kasar

…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…

Devashree Ispat (P) Ltd., Kolkata vs. ITO Ward - 3(4), Kolkata

Appeal is allowed

ITA 2113/KOL/2018[2010-11]Status: DisposedITAT Kolkata22 Mar 2019AY 2010-11

Bench: Shri S.S, Godaraassessment Year:2010-11 Devashree Ispat (P) Ltd., Income Tax Officer, बनाम / C/O Sri S.L Kochar, Ward-3(4), Aayakar V/S. Advocate, 5, Ashutosh Bhawan, Poorva, Choudhury Avenue, Kolkata-107 Kolkata-19 [Pan No.Aaccd 0753 E] .. अपीलाथ" /Appellant ""यथ" /Respondent Shri Anil Kochar, Advocate अपीलाथ" क" ओर से/By Appellant Shri C.J. Singh, Jcit, Sr-Dr ""यथ" क" ओर से/By Respondent 06-03-2019 सुनवाई क" तार"ख/Date Of Hearing 22-03-2019 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R This Assessee’S Appeal For Assessment Year 2010-11, Arises Against The Commissioner Of Income-Tax (Appeals)-22, Kolkata’S Order Dated 20.07.2018 Passed In Case No.109/Cit(A)-22/10-11/15-16/Kol, Involving Proceedings U/S. 143(3) Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. Case File Perused. 2. The Assessee’S Sole Substantive Ground Challenges Correctness Of Both The Lower Authorities Action Adding Excess Difference Of ₹4,61,966/- As Income Of The Impugned Assessment Year. The Cit(A)’S Detailed Discussion To This Effect Reads As Under:- “06. Findings & Decision: 1. I Have Carefully Considered The Action Of The Ld. Ao As Also The Reasons Recorded For Such Action, As Well As The Arguments Advanced By The Appellant/Ld. Ars. I Have Carefully Perused The Judicial Decisions Available On The Subject. In Ao Has Discussed His Reasons For Making The Addition On Account Of Marked To Market Foreign Exchange Gain Of Rs.4,61,966/-. In The Audit Report Accompanying The Accounts, The Auditor Had Categorically Mentioned That Unrealized Foreign Exchange Gain On The Open Forward Contracts At The Year-End Amounted To Rs.4,61,966/-. Upon Being Questioned By The Ld Ao As To Why This Gain Was Not

Section 143(3)

…be crystallized / realized in the previous year relevant to succeeding year for the sufficient basis for the taxpayer for not recording the same as income of assessment year in issue hon'ble apex court’s landmark decision in Chainrup Samapatram vs. CIT (1953) 24 ITR 481 (SC) holds that profits merely on anticipation cannot be recorded as income till realization thereof and at the same time an anticipation losses can be allowed to be deducted from commercial profits at the first sign of reasonable possibility. Their lordships detailed discussion to this effect reads as under:- “… .. The true purpose of crediting t…

The Addl. CIT, Range-1, Ahmedabad vs. M/S. Adani Enterprises Ltd., Ahmedabad

In the result, the appeal of the Assessing Officer for the assessment year 2010-11 is dismissed

ITA 2531/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad12 Feb 2019AY 2010-11
Section 143(3)Section 14ASection 3

…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 v. CIT [1953] 24 ITR 481, which explains the valuation of closing stock on ITA Nos.: 1840/Ahd/12, 3321/Ahd/14 and 2305/Ahd/15 and 1918/Ahd/12,3480/Ahd/ 14 and 2531/Ahd/15 Assessment years: 2008-09, 2009-10 and 2010-11 Page 10 of 43 market price or cost price whichever is less. There is thus, in principle, no difficulty is seeking a deduction in respect of a reasonably an…

Adani Enterprises Ltd., Ahmedabad vs. The Addl. CIT, Range-1, Ahmedabad

In the result, the appeal of the Assessing Officer for the assessment year 2010-11 is dismissed

ITA 2305/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad12 Feb 2019AY 2010-11
Section 143(3)Section 14ASection 3

…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 v. CIT [1953] 24 ITR 481, which explains the valuation of closing stock on ITA Nos.: 1840/Ahd/12, 3321/Ahd/14 and 2305/Ahd/15 and 1918/Ahd/12,3480/Ahd/ 14 and 2531/Ahd/15 Assessment years: 2008-09, 2009-10 and 2010-11 Page 10 of 43 market price or cost price whichever is less. There is thus, in principle, no difficulty is seeking a deduction in respect of a reasonably an…

Dy.Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad vs. M/S. Adani Enterprises Ltd., Ahmedabad

In the result, the appeal of the Assessing Officer for the assessment year 2010-11 is dismissed

ITA 3480/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad12 Feb 2019AY 2009-10
Section 143(3)Section 14ASection 3

…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 v. CIT [1953] 24 ITR 481, which explains the valuation of closing stock on ITA Nos.: 1840/Ahd/12, 3321/Ahd/14 and 2305/Ahd/15 and 1918/Ahd/12,3480/Ahd/ 14 and 2531/Ahd/15 Assessment years: 2008-09, 2009-10 and 2010-11 Page 10 of 43 market price or cost price whichever is less. There is thus, in principle, no difficulty is seeking a deduction in respect of a reasonably an…

Adani Enterprises Ltd., Ahmedabad vs. The Addl. CIT, Range-1, Ahmedabad

In the result, the appeal of the Assessing Officer for the assessment year 2010-11 is dismissed

ITA 3321/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad12 Feb 2019AY 2009-10
Section 143(3)Section 14ASection 3

…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 v. CIT [1953] 24 ITR 481, which explains the valuation of closing stock on ITA Nos.: 1840/Ahd/12, 3321/Ahd/14 and 2305/Ahd/15 and 1918/Ahd/12,3480/Ahd/ 14 and 2531/Ahd/15 Assessment years: 2008-09, 2009-10 and 2010-11 Page 10 of 43 market price or cost price whichever is less. There is thus, in principle, no difficulty is seeking a deduction in respect of a reasonably an…

The DCIT, Circle-1, Ahmedabad vs. Adani Enterprises Ltd., Ahmedabad

In the result, the appeal of the Assessing Officer for the assessment year 2010-11 is dismissed

ITA 1918/AHD/2012[2008-09]Status: DisposedITAT Ahmedabad12 Feb 2019AY 2008-09
Section 143(3)Section 14ASection 3

…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 v. CIT [1953] 24 ITR 481, which explains the valuation of closing stock on ITA Nos.: 1840/Ahd/12, 3321/Ahd/14 and 2305/Ahd/15 and 1918/Ahd/12,3480/Ahd/ 14 and 2531/Ahd/15 Assessment years: 2008-09, 2009-10 and 2010-11 Page 10 of 43 market price or cost price whichever is less. There is thus, in principle, no difficulty is seeking a deduction in respect of a reasonably an…

Adani Enterprises Ltd., Ahmedabad vs. The Addl.CIT., Range-1, Ahmedabad

In the result, the appeal of the Assessing Officer for the assessment year 2010-11 is dismissed

ITA 1840/AHD/2012[2008-09]Status: DisposedITAT Ahmedabad12 Feb 2019AY 2008-09
Section 143(3)Section 14ASection 3

…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 v. CIT [1953] 24 ITR 481, which explains the valuation of closing stock on ITA Nos.: 1840/Ahd/12, 3321/Ahd/14 and 2305/Ahd/15 and 1918/Ahd/12,3480/Ahd/ 14 and 2531/Ahd/15 Assessment years: 2008-09, 2009-10 and 2010-11 Page 10 of 43 market price or cost price whichever is less. There is thus, in principle, no difficulty is seeking a deduction in respect of a reasonably an…

DCIT, Cental Circle -2(2), Kolkata vs. M/S/ Aryan Minning & Trading Corporation Ltd, Kolakta

In the result, the appeal of the Revenue is dismissed

ITA 1601/KOL/2017[2012-13]Status: DisposedITAT Kolkata01 Feb 2019AY 2012-13

Bench: Sh. A.T.Varkey & Sh. A.L.Sainidcit, M/S. Aryan Mining & Central Circle-2(2), Aayakar V Trading Corporation Ltd., P-1, Hide Lane, 8Th Floor, Bhawan, Poorva, 110 S Shantipally, Kolkata-700073. Kolkata-700107. Pan-Aadca7247B (Appellant) (Respondent) Appellant By Sh. A.K.Singh, Cit Dr Respondent By Sh. A.K.Tulsyan, Fca & Ms. Sikha Agarwal, Aca 27.12.2018 Date Of Hearing 01.02.2019 Date Of Pronouncement

Section 132Section 132(4)Section 143(3)Section 271A

…y not challenging the order, it would. not be at all appropriate to allow the position to be changed in a subsequent year.” 15. It is also material to take note of the judgment of the Hon’ble Supreme Court in the case of Chainrup Sampatram v. CIT reported in 24 ITR 481, approving the underlying rule that the closing stock is to be valued at cost or market price, whichever is the lower, and that it is now generally accepted as an established rule of commercial practice and accountancy. In that judgment the Hon’ble Apex Court also observed that the valuation of closing stock cannot be construed to be a source of i…

The Income Tax Officer, Amritsar vs. Sh. Shiv Raj Singh Bawa, Amritsar

In the result, the Revenue’s appeal is allowed and the assessee’s CO, dismissed

ITA 407/ASR/2016[2012-13]Status: DisposedITAT Amritsar30 Jan 2019AY 2012-13

Bench: Sh. Sanjay Arora & Sh. N. K. Choudhryi.T.A. No. 407/Asr/2016 Assessment Year: 2012-13

For Appellant: Sh. Charan Dass (D.R.)For Respondent: Sh. Tarun Bansal (Adv.)
Section 143(3)Section 40A(3)

…s, made mandatory u/s. 145(2) of the Act as well as the Companies Act. The actual cost would therefore imply the actual cost incurred by the assessee; the valuation of closing stock being not, as explained by the Apex Court in Chainrup Sampatram v. CIT [1953] 24 ITR 481 (SC), a source of profit, but only to offset the cost as debited in the accounts, i.e., to arrive at the correct profit or loss. Section 40A(3) is a legal fiction whereby an expenditure (in the present context being the cost of goods purchased for the purpose of business) stands to be disallowed to the extent the payment in its respect is made oth…

M.P. Jewellers (Calcutta) & Co., Kolkata vs. JCIT, Range - 40, Kolkata

In the result, the appeal of the assessee is allowed

ITA 2220/KOL/2017[2011-12]Status: DisposedITAT Kolkata23 Jan 2019AY 2011-12

Bench: Shri A.T.Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.2220/Kol/2017 ("नधा"रणवष" / Assessment Year: 2011-12)

For Appellant: Shri A. Biswas, FCA & Shri D. Dasgupta, ARFor Respondent: Shri Pijush Mukherjee, Addl. CIT Sr. DR
Section 143(3)

…IN THE INCOME TAX APPELLATE TRIBUNAL “B”, BENCH KOLKATA BEFORE SHRI A.T.VARKEY, JM &DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.2220/Kol/2017 ("नधा"रणवष" / Assessment Year: 2011-12) M.P. Jewellers (Calcutta) & Co. Vs. JCIT, Range-40, Kolkata P-227, C.I.T. Scheme-VIM, Kolkata- 3, Government Place, Kolkata-700001. 700045 "थायीलेखासं./जीआइआरसं./PAN/GIR No.: AASFM 6237 F (Assessee) .. (Revenue) Assessee by : Shri A. Biswas, FCA & Shri D. Dasgupta, AR Respondent by : Shri Pijush Mukherjee, Addl. CIT Sr. DR सुनवाईक"तार"ख/ Date of Hearing : 01/01/2019 घोषणाक"तार"ख/Date of Pronouncement : 23/01/2019 आदेश / O R D E R Per…

Deputy Commissioner of Income Tax, Circle-1, Kakinada vs. Sar Chandra Environ Solutions Private Limited, Kakinada

In the result, appeals filed by the Revenue and the cross objections filed by the assessee are dismissed

ITA 149/VIZ/2018[2014-15]Status: DisposedITAT Visakhapatnam28 Nov 2018AY 2014-15

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Mrs. Suman Malik – Sr.DR
Section 143(1)Section 148

…eduction or enhancement of profit. It is merely a process of carrying forward of costs for goods which are yet to be sold at the year end. Valuation of stock-in-trade is not a source of profit, as laid by the Supreme Court in Chainrup Sampatram v. CIT, (1953) 24 ITR 481, 487 (SC). In the case of Rotork Controls India Pvt. Ltd. (314 ITR 62) wherein the SC has observed that a provision of liability is recognized when : (1) An enterprise has a present obligation as a result of a past event (ii) It is probable that an outflow of 5 ITA Nos.147-149/VIZ/2018 C.O.Nos. 29-31/VIZ/2018 (M/s. SAR Chandra Environ Solutions P…

Deputy Commissioner of Income Tax, Circle-1, Kakinada vs. Sar Chandra Environ Solutions Private Limited, Kakinada

In the result, appeals filed by the Revenue and the cross objections filed by the assessee are dismissed

ITA 148/VIZ/2018[2013-14]Status: DisposedITAT Visakhapatnam28 Nov 2018AY 2013-14

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Mrs. Suman Malik – Sr.DR
Section 143(1)Section 148

…eduction or enhancement of profit. It is merely a process of carrying forward of costs for goods which are yet to be sold at the year end. Valuation of stock-in-trade is not a source of profit, as laid by the Supreme Court in Chainrup Sampatram v. CIT, (1953) 24 ITR 481, 487 (SC). In the case of Rotork Controls India Pvt. Ltd. (314 ITR 62) wherein the SC has observed that a provision of liability is recognized when : (1) An enterprise has a present obligation as a result of a past event (ii) It is probable that an outflow of 5 ITA Nos.147-149/VIZ/2018 C.O.Nos. 29-31/VIZ/2018 (M/s. SAR Chandra Environ Solutions P…

The Deputy Commissioner of Income Tax, Circle-1, Kakinada vs. Sar Chandra Environ Solutions Private Limited, Kakinada

In the result, appeals filed by the Revenue and the cross objections filed by the assessee are dismissed

ITA 147/VIZ/2018[2010-11]Status: DisposedITAT Visakhapatnam28 Nov 2018AY 2010-11

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Mrs. Suman Malik – Sr.DR
Section 143(1)Section 148

…eduction or enhancement of profit. It is merely a process of carrying forward of costs for goods which are yet to be sold at the year end. Valuation of stock-in-trade is not a source of profit, as laid by the Supreme Court in Chainrup Sampatram v. CIT, (1953) 24 ITR 481, 487 (SC). In the case of Rotork Controls India Pvt. Ltd. (314 ITR 62) wherein the SC has observed that a provision of liability is recognized when : (1) An enterprise has a present obligation as a result of a past event (ii) It is probable that an outflow of 5 ITA Nos.147-149/VIZ/2018 C.O.Nos. 29-31/VIZ/2018 (M/s. SAR Chandra Environ Solutions P…

M/S Subash Chander Aggarwal, Jalandhar vs. Assistant Commissioner of Income Tax Range II, Jalandhar

In the result, the assessee’s appeals are dismissed

ITA 739/ASR/2017[2010-2011]Status: DisposedITAT Amritsar29 Oct 2018AY 2010-2011

Bench: Sh. Sanjay Arora & Sh. N. K. Choudhryi. T. A. Nos. 738 & 739/(Asr)/2017 Assessment Years: 2009-10 & 2010-11

For Appellant: Sh. J. S. Bhasin (Adv.)For Respondent: Sh. Gautam Deb (D.R.)
Section 133ASection 143(3)

…h about the correctness of the closing stock, the principal ingredient for arriving at the trading results, i.e., in the absence of stock records, so that the same could not be ascertained, as explained in many decision, as in Chainrup Sampatram v. CIT [1953] 24 ITR 481 (SC), the ld. counsel, Sh. Bhasin, Advocate, would submit that, even so, rejection of accounts would not per se entitle the Revenue to make an addition, much less at an arbitrary sum. That is, an addition is not a concomitant of rejection of accounts, as explained in CIT v. Gotan Lime Khanij Udhyog [2002] 256 ITR 243 (Raj). The assessee’s book res…

M/S. Sbash Chander Aggarwal, Jalandhar vs. Assistant Commisioner of Income Tax Range -II, Jalandhar

In the result, the assessee’s appeals are dismissed

ITA 738/ASR/2017[2009-10]Status: DisposedITAT Amritsar29 Oct 2018AY 2009-10

Bench: Sh. Sanjay Arora & Sh. N. K. Choudhryi. T. A. Nos. 738 & 739/(Asr)/2017 Assessment Years: 2009-10 & 2010-11

For Appellant: Sh. J. S. Bhasin (Adv.)For Respondent: Sh. Gautam Deb (D.R.)
Section 133ASection 143(3)

…h about the correctness of the closing stock, the principal ingredient for arriving at the trading results, i.e., in the absence of stock records, so that the same could not be ascertained, as explained in many decision, as in Chainrup Sampatram v. CIT [1953] 24 ITR 481 (SC), the ld. counsel, Sh. Bhasin, Advocate, would submit that, even so, rejection of accounts would not per se entitle the Revenue to make an addition, much less at an arbitrary sum. That is, an addition is not a concomitant of rejection of accounts, as explained in CIT v. Gotan Lime Khanij Udhyog [2002] 256 ITR 243 (Raj). The assessee’s book res…

ITO, WD-1(4), Kolkata vs. M/S Command Constructions Pvt. Ltd., Kolkata

In the result, the appeal by the Revenue is dismissed”

ITA 571/KOL/2015[2006-2007]Status: DisposedITAT Kolkata16 Oct 2018AY 2006-2007

Bench: Hon’Ble Shri A T Varkey, Jm & Shri M.Balaganesh, Am] I.T.A No. 571/Kol/2015 Assessment Year : 2006-07 Ito, Ward-1(4), Kolkata -Vs- M/S Command Constructions Private Ltd. [Pan: Aaccc5075A ] (Appellant) (Respondent)

For Appellant: Shri Md.Usman, CIT DRFor Respondent: Shri J. P. Khaitan, Sr. Counsel
Section 143(1)Section 147Section 148Section 45(3)

…ng year. Secondly, putting the stock at the 12 13 M/s Command Construction Pvt. Ltd. A.Yr. 2006-07 market value does not and cannot bring in any real profit which is necessary for taxing the income under the Act as is held in Chainrup Sampatram v. CIT [1953] 24 ITR 481 (SC) and CIT v. Hind Construction Ltd [1972 ] 83 ITR 211 (SC). Thirdly, it is a settled principle of income-tax law that it is the real income, which is taxable under the Act. This proposition was enunciated in CIT v. Birla Gwalior (P.) Ltd [1973] 89 ITR 266 (SC), which was pronounced in CIT v. Shoorji Vallabhdas and CO. [1962] 46 ITR 144 (SC)."…

Modern Agencies, Jhansi vs. ACIT Circle-6, Jhansi

In the result, both the appeals of the assessee are partly

ITA 438/AGR/2015[2010-11]Status: DisposedITAT Agra05 Oct 2018AY 2010-11
Section 145(3)

…dit report and audited accounts. 3.8 It is a well-established Accounting Policy that all stock in trade is to be valued at Cost or Net Realisable Value, whichever is lower. The AS-2 pronounced by ICAI supports the view. In the case of ChainrupSampatram V. CIT[24 ITR 481 (SC)] the apex court confirmed that closing stock is to be valued at cost or market price whichever is less. It held that “This is the theory underlying the rule that the closing stock is to be valued at cost or market price whichever the lower is, and it is now generally accepted as an established rule of commercial practice and accountancy.” 3.9…

ITO, WD-1(4), Kolkata vs. M/S Orchid Griha Nirman Private Ltd., Kolkata

In the result, the appeal by the Revenue is dismissed”

ITA 569/KOL/2015[2006-2007]Status: DisposedITAT Kolkata26 Sept 2018AY 2006-2007

Bench: Hon’Ble Shri M.Balaganesh, Am & Shri S.S. Viswanethra Ravi, Jm] I.T.A No. 569/Kol/2015 Assessment Year : 2006-07 Ito, Ward-1(4), Kolkata -Vs- M/S Orchid Griha Nirman Pvt. Ltd. [Pan: Aaaco 7148 L ] (Appellant) (Respondent)

For Appellant: Shri Goulean Hangshing, CIT DRFor Respondent: Shri J. P. Khaitan, Sr. Counsel
Section 143(1)Section 147Section 148Section 45(3)

…emained with the assessee at the closing of the accounting year. Secondly, putting the stock at the market value does not and cannot bring in any real profit which is necessary for taxing the income under the Act as is held in Chainrup Sampatram v. CIT [1953] 24 ITR 481 (SC) and CIT v. Hind Construction Ltd [1972 ] 83 ITR 211 (SC). Thirdly, it is a settled principle of income-tax law that it is the real income, which is taxable under the Act. This proposition was enunciated in CIT v. Birla Gwalior (P.) Ltd [1973] 89 ITR 266 (SC), which was pronounced in CIT v. Shoorji Vallabhdas and CO. [1962] 46 ITR 144 (SC)."…