Chainrup Sampatram v. CIT

DCIT Cen Cir 10, Mumbai vs. Rustomjee Evershine Joint Venture P.Ltd, Thane

Bench: Shri Joginder Singh, Jm & Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./I.T.A. No. 5613/Mum/2014 (िनधा"रण वष" / Assessment Year: 2010-11) Deputy Commissioner Of Income Rustomjee Evershine Joint Tax, Central Circle 10 Venture Private Limited बनाम/ Room No.802,8Th Floor Global City, Narangi Bypass Road Old Cgo Annexe, M.K.Road Close To Viva College Vs. Mumbai – 400 020 Virar(West),Thane Thane-401 303 (अपीलाथ" /Appellant) (""थ" / Respondent) : & Cross Objection No.111/Mum/2017 (िनधा"रण वष" / Assessment Year: 2010-11) Rustomjee Evershine Joint Deputy Commissioner Of Venture Private Limited Income Tax, Central Circle 10 बनाम/ Room No.802,8Th Floor Global City, Narangi Bypass Road Close To Viva College Old Cgo Annexe, M.K.Road Vs. Virar(West),Thane Mumbai – 400 020 Thane-401 303 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaaar-7687-M (अपीलाथ" /Appellant) (""थ" / Respondent) :

…been regularly employed by the assessee, the AO may make an assessment in the manner provided in s. 144.” 10. In support of the above findings, this Court had placed reliance on the following decisions of the apex Court: (1) Chainrup Sampatram vs. CIT (1953) 24 ITR 481 (SC); (2) Investment Ltd. Vs. CIT (1970) 77 ITR 533 (SC); and (3) A.L.A. Firm vs. CIT (1991) 93 CTR (SC) 133 : (1991) 189 ITR 285 (SC). 11. We may recapitulate the following observations of the Hon’ble Supreme Court in Investment Ltd. Vs. CIT(supra) : “ A taxpayer is free to employ, for the purpose of his trade, his own method of keeping accounts,…

Addl CIT 2(1), Mumbai vs. Gtl Ltd, Mumbai

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwal

…3) 88 : TC1R.131, S.N. Namasivayam Chettair vs. CIT (1960) 38 ITR 579 (SC) : (1960) TAX 13(3) -105 : TC1R.532, IRC vs. Cock, Rusell and Co. Ltd. (1949) 29 Tax Cases 387, Whimster and Co. vs. IRC (1917-26) 12 Tax Cases 813 and Chainrup Sampatram vs. CIT (1953) 24 ITR 481 (SC) : TC2R.124 relied on. xxxxxxxxxxxxxxxxxxxxxxxxxx 5.6. Broadly, in the aforesaid case, the Hon'ble Court has held that where the market value has fallen before the date of valuation and, on that date, the market value of the article is less than its actual cost, the assessee is entitled to value the articles at market value and thus anticipate…

Arun Bahirwani, Mumbai vs. Asst CIT 15(2), Mumbai

In the result, appeal filed by the assessee in ITA No

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.2232/Mum/2015 ("नधा"रण वष" / Assessment Year : 2007-08) Shri Arun Bahirwani (Prop. Asst. Commissioner Of बनाम/ Satya Tex), Income Tax – 15(2), V. Unit No. 605 Business Aayakar Bhawan, Suites,Plot No. 83, Mumbai – 400 020. S.V. Road, Santacruz (W), Mumbai – 400 054. "थायी लेखा सं./Pan : Agjpb7487M (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

…s lower based on the arithmetic on the one hand and prudence on the other is also to be followed for computing income of the assessee. In support, the ld. CIT(A) relied upon the decision of Hon’ble Supreme Court in the case of Chainrup Sampatram v. CIT (1953) 24 ITR 481 (SC) and Investment Limited v. CIT (1970) 77 ITR 533 (SC). It was observed by learned CIT(A) that the assessee is contending that it is consistently following FIFO method for valuation of inventory while the auditors of the assessee had stated that it followed a cost method and hence the AO was left with no option but to take average rate for valu…

D.S.P. Merill Lynch Capital Ltd, Mumbai vs. Asst CIT (OSD) Cir 3(1), Mumbai

In the result, Revenue’s appeal for A

Bench: Shri Saktijit Dey & Shri N.K. Pradhan

…t or market price whichever is the lower, and it is now generally accepted as an established rule of commercial practice and accountancy”. This is what the Supreme Court held in the case of Chainrup Sampatram v/s Commissioner of Income Tax, West Bengal (1953) 24 ITR 481 (SC), speaking through Hon’ble Justice Patanjali Sastri, the then Chief Justice of India (Pate–485 – 486 of the Report). At page 486 the Hon'ble Supreme Court further observed that “loss due to a fall in price below cost is allowed even if such loss has not been actually realized”. Quoting from the case of Whimster & Co. v/s Commissioners of Inlan…

Novodigm Ltd ( Sinceamalgamated With Lupin Ltd), Mumbai vs. ACIT (Ltu), Mumbai

In the result, appeal of the assessee is allowed in part

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm M/S. Novodigm Ltd., (Since Vs. Acit (Ltu) Amalgamated With Lupin Ltd.,) Lupin Limited 159, C.S.T. Road, Kalina Santacruz (E), Mumbai – 400 098 Pan/Gir No. Aaacl1069K Appellant) .. Respondent)

…luation has been continued in the subsequent assessment years. Thus, the assessee company's claim of loss was bonafide and proper. The issue under consideration is squarely covered by the decision of Hon’ble Supreme Court the case of Chainrup Sampatram v. CIT 24 ITR 481. 485. 487 (SC) wherein it was held that:- "As the entry for stock which appears in a trading account is merely intended to cancel the charges for the goods purchased which have not been sold, it should necessarily represent the cost of the goods. If it is more or less than the cost, then the effect is to state the profit on the goods which actual…

The Hindustan Co Operative Bank Ltd, Mumbai vs. Jt CIT 13(3), Mumbai

In the result, the assessee’s appeal is partly allowed and partly allowed for statistical purposes

Bench: Shri Sanjay Arora, Am & Shri Amarjit Singh, Jm आयकर अपील सं./I.T.A. No. 1501/Mum/2014 ("नधा"रण वष" / Assessment Year: 2009­10) The Hindustan Co­Operative Bank Ltd. Jt. Cit­13(3), बनाम/ 4­A, Devi Galli, Baburao Bobde Marg, Aaykar Bhavan, Vs. Lokhand Bazar, Mumbai­400 009 Mumbai "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabat 4355 R (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant By : Shri Amar Gahlot, Shri S. Sriram ""यथ" क" ओर से/Respondent By : Shri B. Satyanarayana Raja सुनवाई क" तार"ख / : 01.7.2016 Date Of Hearing घोषणा क" तार"ख / : 24.10.2016 Date Of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: This Is An Appeal By The Assessee Directed Against The Order By The Commissioner Of Income Tax (Appeals)­24, Mumbai (‘Cit(A)’ For Short) Dated 19.11.2013, Dismissing The Assessee’S Appeal Contesting Its Assessment U/S.143(3) Of The Income Tax Act, 1961 (‘The Act’ Hereinafter) For The Assessment Year (A.Y.) 2009­ 10 Vide Order Dated 21.12.2011. 2. The Assessee, A Co­Operative Bank In The Business Of Banking, Governed By The Banking Regulation Act, 1949 As Well As The Maharashtra State Co­Operative Societies Act, 1960, Claimed ‘Investment Loss Adjusted From Idr’ In The Sum Of Rs.80.991 Lacs In The Computation Of Its Business Income For The Year (Pb Pgs. 24­26). It Is This Claim

…e 7 The Hindustan Co-operative Bank Ltd. vs. Jt. CIT statutorily mandated by Accounting Standard (AS)­I notified by CBDT u/s. 145(2) of the Act. This, in fact, is a fundamental accounting premise, judicially well­recognized (Chainrup Sampatram vs. CIT [1953] 24 ITR 481 (SC)). As explained therein, it is this method only that leads to disclosing true and correct profit or gain and, correspondingly, the true state of affairs. This, as the stock­in­trade, which is realizable in the ordinary course of trade by disposing in the market, cannot fetch more than its market value, which has declined below cost, so that lo…

DCIT 17(1), Mumbai vs. M/S S.M. Steel, Mumbai

In the result appeal of the Revenue is dismissed

Bench: Shri R.C. Sharma() & Shri Amarjeet Singh ()

…consistently one particular method of valuation of inventory, the AO. cannot think of altering the same unless he is satisfied with the correctness or completeness of the accounts of the appellant. 12 In the case Chainrup Sampatram v. CIT [1953] reported in 24 ITR 481, the Hon'ble Supreme Court had laid down firstly, that profits do not arise out of valuation of closing stock. Secondly, that valuation of unsold stock at the close of the accounting period is a necessary part of the process of determining the trading results and it cannot be regarded as source of such profits. The addition made to the closing sto…

JCIT 17(1), Mumbai vs. S.M. Steels, Mumbai

In the result appeal of the Revenue is dismissed

Bench: Shri R.C. Sharma() & Shri Amarjeet Singh ()

…consistently one particular method of valuation of inventory, the AO. cannot think of altering the same unless he is satisfied with the correctness or completeness of the accounts of the appellant. 12 In the case Chainrup Sampatram v. CIT [1953] reported in 24 ITR 481, the Hon'ble Supreme Court had laid down firstly, that profits do not arise out of valuation of closing stock. Secondly, that valuation of unsold stock at the close of the accounting period is a necessary part of the process of determining the trading results and it cannot be regarded as source of such profits. The addition made to the closing sto…