CIT v. B.C. Srinivasa Setty

128 ITR 294Supreme Court of India1981#92 most cited

What is CIT v. B.C. Srinivasa Setty authority for?

When the cost of acquisition of a capital asset cannot be determined, the computation mechanism for capital gains fails, and thus no capital gains can be charged. This establishes a broader principle that a charging section cannot operate in the absence of specific machinery provisions for computation.

628

judgments rely on this decision, according to BharatTax’s citation analysis of 367,181 Indian tax judgments — from 2005 to 2026.

Also referred to as

CIT v. B.C. Srinivasa Setty · 128 ITR 294 · Section 45 · Section 48 · Section 55(2) · cost of acquisition · capital gains computation · machinery provision · unascertainable cost · intangible assets · taxability of goodwill · no tax without machinery

Also reported as

5 Taxmann 1

Sections most often in play

Section 143(3)Section 115JBSection 92BSection 234BSection 45Section 55(2)Section 143(2)Section 144

Issues it is cited on

section 211section 55section 32(1)(ii)section 21section 92bsection 32(1)intangible assetssection 48section 45book profitsfair market valuesection 115j

Judgments citing CIT v. B.C. Srinivasa Setty

Sri.Jose Thomas, Adoor vs. The DCIT, Cen-Circle, Kottayam

In the result, the appeals of the assessesin ITA no

ITA 30/COCH/2019[2007-08]Status: DisposedITAT Cochin30 Sept 2019AY 2007-08

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

…ent in the subsequent assessment years on receipt basis. With regard to the computation of capital gains u/s. 48 on the transfer and charging the same u/s. 45, the Ld. AR relied on the judgment of the Apex Court in the case of CIT vs. B.C. Sreenivasa Shetty (128 ITR 294) wherein it was held that if the cost of acquisition of the asset transferred is indeterminable no capital gains can be computed. In the assessee’s case, the cost of acquisition of the asset transferred was indeterminable or not specified in section 55 of the Act. 11.3 The contention of the Ld. DR is that a person appointed as a trustee in a p…

Sri.Jose Thomas, Adoor vs. The DCIT, Cen-Circle, Kottayam

In the result, the appeals of the assessesin ITA no

ITA 29/COCH/2019[2006-07]Status: DisposedITAT Cochin30 Sept 2019AY 2006-07

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

…ent in the subsequent assessment years on receipt basis. With regard to the computation of capital gains u/s. 48 on the transfer and charging the same u/s. 45, the Ld. AR relied on the judgment of the Apex Court in the case of CIT vs. B.C. Sreenivasa Shetty (128 ITR 294) wherein it was held that if the cost of acquisition of the asset transferred is indeterminable no capital gains can be computed. In the assessee’s case, the cost of acquisition of the asset transferred was indeterminable or not specified in section 55 of the Act. 11.3 The contention of the Ld. DR is that a person appointed as a trustee in a p…

Sri.Jose Thomas, Adoor vs. The DCIT, Cen-Circle, Kottayam

In the result, the appeals of the assessesin ITA no

ITA 28/COCH/2019[2005-06]Status: DisposedITAT Cochin30 Sept 2019AY 2005-06

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

…ent in the subsequent assessment years on receipt basis. With regard to the computation of capital gains u/s. 48 on the transfer and charging the same u/s. 45, the Ld. AR relied on the judgment of the Apex Court in the case of CIT vs. B.C. Sreenivasa Shetty (128 ITR 294) wherein it was held that if the cost of acquisition of the asset transferred is indeterminable no capital gains can be computed. In the assessee’s case, the cost of acquisition of the asset transferred was indeterminable or not specified in section 55 of the Act. 11.3 The contention of the Ld. DR is that a person appointed as a trustee in a p…

Sri.Jose Thomas, Adoor vs. The DCIT, Cen-Circle, Kottayam

In the result, the appeals of the assessesin ITA no

ITA 27/COCH/2019[2004-05]Status: DisposedITAT Cochin30 Sept 2019AY 2004-05

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

…ent in the subsequent assessment years on receipt basis. With regard to the computation of capital gains u/s. 48 on the transfer and charging the same u/s. 45, the Ld. AR relied on the judgment of the Apex Court in the case of CIT vs. B.C. Sreenivasa Shetty (128 ITR 294) wherein it was held that if the cost of acquisition of the asset transferred is indeterminable no capital gains can be computed. In the assessee’s case, the cost of acquisition of the asset transferred was indeterminable or not specified in section 55 of the Act. 11.3 The contention of the Ld. DR is that a person appointed as a trustee in a p…

The ACIT Cen-Circle, Kottayam vs. Smt.Gracy Babu, Adoor P.O

In the result, the appeals of the assesses in ITA no

ITA 239/COCH/2019[2011-12]Status: DisposedITAT Cochin30 Sept 2019AY 2011-12

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

…ent in the subsequent assessment years on receipt basis. With regard to the computation of capital gains u/s. 48 on the transfer and charging the same u/s. 45, the Ld. AR relied on the judgment of the Apex Court in the case of CIT vs. B.C. Sreenivasa Shetty (128 ITR 294) wherein it was held that if the cost of acquisition of the asset transferred is indeterminable no capital gains can be computed. In the assessee’s case, the cost of acquisition of the asset transferred was indeterminable or not specified in section 55 of the Act. 11.3 The contention of the Ld. DR is that a person appointed as a trustee in a p…

The ACIT, Cen-Circle, Kottayam vs. Sri.Jose Thomas, Adoor

In the result, the appeals of the assesses in ITA no

ITA 238/COCH/2019[2011-12]Status: DisposedITAT Cochin30 Sept 2019AY 2011-12

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

…ent in the subsequent assessment years on receipt basis. With regard to the computation of capital gains u/s. 48 on the transfer and charging the same u/s. 45, the Ld. AR relied on the judgment of the Apex Court in the case of CIT vs. B.C. Sreenivasa Shetty (128 ITR 294) wherein it was held that if the cost of acquisition of the asset transferred is indeterminable no capital gains can be computed. In the assessee’s case, the cost of acquisition of the asset transferred was indeterminable or not specified in section 55 of the Act. 11.3 The contention of the Ld. DR is that a person appointed as a trustee in a p…

Sri.Jose Thomas, Adoor P.O., Pathanamthitta vs. The ACIT, Cen-Circle, Kottayam

In the result, the appeals of the assessesin ITA no

ITA 213/COCH/2019[2011-12]Status: DisposedITAT Cochin30 Sept 2019AY 2011-12

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

…ent in the subsequent assessment years on receipt basis. With regard to the computation of capital gains u/s. 48 on the transfer and charging the same u/s. 45, the Ld. AR relied on the judgment of the Apex Court in the case of CIT vs. B.C. Sreenivasa Shetty (128 ITR 294) wherein it was held that if the cost of acquisition of the asset transferred is indeterminable no capital gains can be computed. In the assessee’s case, the cost of acquisition of the asset transferred was indeterminable or not specified in section 55 of the Act. 11.3 The contention of the Ld. DR is that a person appointed as a trustee in a p…

Mrs.Gracy Babu, Adoor P.O., Pathanamthitta vs. The DCIT, Cen-Circle, Kottayam

In the result, the appeals of the assessesin ITA no

ITA 210/COCH/2019[2011-12]Status: DisposedITAT Cochin30 Sept 2019AY 2011-12

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

…ent in the subsequent assessment years on receipt basis. With regard to the computation of capital gains u/s. 48 on the transfer and charging the same u/s. 45, the Ld. AR relied on the judgment of the Apex Court in the case of CIT vs. B.C. Sreenivasa Shetty (128 ITR 294) wherein it was held that if the cost of acquisition of the asset transferred is indeterminable no capital gains can be computed. In the assessee’s case, the cost of acquisition of the asset transferred was indeterminable or not specified in section 55 of the Act. 11.3 The contention of the Ld. DR is that a person appointed as a trustee in a p…

DCIT - 14(2)(2), Mumbai vs. Lafarge Aggregates & Concrete India Pvt. Ltd., Mumbai

In the result, both the appeals of the Revenue are dismissed

ITA 4477/MUM/2018[2013-14]Status: DisposedITAT Mumbai24 Sept 2019AY 2013-14

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Anadi Varma
Section 143(3)Section 32(1)(ii)

…IT(A) and allowing the claim of the assessee. This issue of Revenue’s appeal is dismissed.” When these facts were confronted to the learned CIT-DR, he only requested that the decisions of the Hon’ble Supreme Court in the case of CIT vs B.C. Srinivasa Shetty, 128 ITR 294 (SC) and the Bangalore Bench of the Tribunal in the case of United Breweries Ltd. vs Addl. CIT, ITA Nos. 722/Bang/2014 and others dated 30.09.2016 be referred to while disposing off the appeal. 5. We noted that this issue is no more res integra and is settled by the order of Tribunal in assessee’s own case for assessment years 2009-10 and 2010-1…

DCIT - 14(2)(2), Mumbai vs. Lafarge Aggregates & Concrete India Pvt. Ltd., Mumbai

In the result, both the appeals of the Revenue are dismissed

ITA 4476/MUM/2018[2014-15]Status: DisposedITAT Mumbai24 Sept 2019AY 2014-15

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Anadi Varma
Section 143(3)Section 32(1)(ii)

…IT(A) and allowing the claim of the assessee. This issue of Revenue’s appeal is dismissed.” When these facts were confronted to the learned CIT-DR, he only requested that the decisions of the Hon’ble Supreme Court in the case of CIT vs B.C. Srinivasa Shetty, 128 ITR 294 (SC) and the Bangalore Bench of the Tribunal in the case of United Breweries Ltd. vs Addl. CIT, ITA Nos. 722/Bang/2014 and others dated 30.09.2016 be referred to while disposing off the appeal. 5. We noted that this issue is no more res integra and is settled by the order of Tribunal in assessee’s own case for assessment years 2009-10 and 2010-1…

India Medtronic Private Limited, Mumbai vs. DCIT, 10(1)(1), Mumbai

The appeal of the assessee is partly allowed in terms of our aforesaid observations

ITA 7263/MUM/2018[2014-15]Status: DisposedITAT Mumbai13 Sept 2019AY 2014-15

Bench: Shri M. Balaganesh & Shri Ravish Soodindia Medtronics Pvt. Ltd. Deputy Commissioner 1241, Solitaire Corporate Park, Of Income-Tax-10(1)(1), Bldg. No.12, 4Th Floor, Andheri Room No. 209, Vs. Ghatkopar Link Road, Aayakar Bhavan,M.K. Road Andheri (E), Mumbai, Mumbai – 400020 Maharashtra- 400093 Pan – Aaaci4227Q (Appellant) (Respondent) Appellant By: S/Shri Rajan R. Vora & Nikhil Tiwari, A.Rs Respondent By: Shri Anand Mohan, D.R Date Of Hearing: 11.07.2019 Date Of Pronouncement: 13.09.2019

For Appellant: S/shri Rajan R. Vora &For Respondent: Shri Anand Mohan, D.R
Section 143(3)Section 144C(13)Section 92B

…sary checks against arbitrariness while at the same time addressing the apprehension of tax avoidance.” 64. In the absence of any machinery provision, bringing an imagined transaction to tax is not possible. The decisions in CIT v. B.C. Srinivasa Setty (1981) 128 ITR 294 (SC) and PNB Finance Ltd. v, CIT (2008) 307 ITR 75 (SC) make this position explicit. Therefore,where the existence of an international transaction involving AMP expense with an ascertainable price is- unable to be shown to exist, even if such price is nil,Chapter X provisions cannot be invoked to undertake a TP adjustment exercise. 1261 & 1238/M/…

Colagate-Palmolive (I) Ltd, Mumbai vs. Addl CIT 10(3), Mumbai

In the result, appeal of the assessee is allowed

ITA 8428/MUM/2010[2006-07]Status: DisposedITAT Mumbai11 Sept 2019AY 2006-07

Bench: Shri G.S. Pannu & Shri Pawan Singhcolgate Palmolive (India) Ltd., Additional Commissioner Of Colgate Research Centre, Income Tax-10(3) Main Street, Vs. Hiranandani, Gardens, Pawai, Mumbai-400076 Pan: Aaacc4309B Appellant Respondent

For Appellant: Sh. Perci J Pardiwala, AdvocateFor Respondent: Shri Anand Mohan (CIT- DR)
Section 14(2)Section 143(3)Section 14ASection 14A(2)Section 254(1)Section 80ISection 92B

…ary checks against arbitrariness while at the same time addressing the apprehension of tax avoidance." 64. In the absence of any machinery provision, bringing an imagined transaction to tax is not possible. The decisions in CIT v. B.C. Srinivasa Setty (1981) 128 ITR 294 (SC) and PNB Finance Ltd. v. CIT (2008) 307 ITR 75 (SC) make this position explicit. Therefore, where the existence of an international transaction involving AMP expense with an ascertainable price is unable to be shown to exist, even if such price is nil, Chapter X provisions cannot be invoked to undertake a TP adjustment exercise. 65. As alrea…

Income Tax Officer Ward-1(1)(2), Bangalore vs. M/S Atria Hydel Power Limited, Bangalore

In the result, ITA Nos.534 to 556/Bang/2018 and CO Nos

ITA 114/BANG/2019[2010-11]Status: DisposedITAT Bangalore28 Aug 2019AY 2010-11

Bench: Shri N. V. Vasudevan & Shri Jason P. Boazassessment Years : 2010-11 Income-Tax Officer, Vs. M/S. Atria Hydel Power Ltd., Ward - 1(1)(2), #1, Palace Road, Bengaluru. Bangalore-560 001. Pan : Aacca 3754 E Appellant Respondent

For Appellant: Shri. V. Srinivasan, AdvocateFor Respondent: Shri. Vikas Suryavamshi, Addl. CIT(DR)(ITAT), Bengaluru
Section 115Section 115JSection 143(3)Section 211(2)Section 80I

…ient of the charging section being incapable of ascertainment with the consequent result that the entire section becomes inapplicable. This argument is, perhaps, inspired by the judgement of the Supreme Court in the case of CIT v. B. C. Srinivasa Setty (1981) 128 ITR 294, though there was no express reference to the said decision. In this case it was held that the charging section and the computation provisions together constitute an integrated code and when there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section.…

DCIT10(3)(2), Mumbai vs. Parle Products Ltd, Mumbai

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

ITA 1699/MUM/2018[1997-98]Status: DisposedITAT Mumbai09 Aug 2019AY 1997-98

Bench: Shri Saktijit Dey & Shri Manoj Kumar Aggarwal

For Appellant: Shri Nitesh JoshiFor Respondent: ShriAwungeshi Gimson a/w

…sentative submitted, as per section 55(2)(a) of the Act, if the capital asset transferred is goodwill and if the cost of acquisition is not ascertainable, it could be taken as nil. Therefore, the decision of the Hon'ble Supreme Court in B.C. Shrinivasa Setty (128 ITR 294), would not apply. In support of his contention, learned Departmental Representative relied upon the following decisions:– i) GuzdarKajora Coal Mines Ltd. v/s cit, [2972] 85 ITR 599 (SC); ii) S.C. Cambatta& Co. Pvt. Ltd. v/s Commissioner of Excess Profits Tax, [1961] 41 ITR 500 (SC); and iii) Desu Venkata Subba Rao v/s WTO, [1983] 6 ITD 341 (Hyd…

Assistant Commissioner of Income Tax-24(1), Mumbai vs. Anil Gulabdas Shah, Mumbai

ITA 5134/MUM/2017[2012-13]Status: DisposedITAT Mumbai09 Aug 2019AY 2012-13

Bench: Hon’Ble Shri Mahavir Singh, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ I.T.A. No.5134/Mum/2017 & Co. No. 319/Mum/2018 (िनधा"रण वष" / Assessment Year: 2012-13) Acit – 24(1) Shri Anil Gulabdas Shah, Room No. 604, 6Th Floor, B-1601, Titanium Towers बनाम/ 16Th Floor, Jai View Chsl Piramal Chamber, Parel Vs. Sahakar Nagar, Andheri (W) Mumbai. Mumbai – 400 058 "थायीलेखासं./जीआइआरसं./Pan/Gir No. Bmfps-8959-E (अपीलाथ"/Appellant)/Respondent (""थ" / Respondent)/Appellant : Revenue By : Shri Satish Chandra Rajore- Ld. Dr Assessee By : Shri Anil G. Shah – Assessee-In-Person सुनवाई की तारीख/ : 05/08/2019 Date Of Hearing घोषणा की तारीख / : 09/08/2019 Date Of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (): - 1. Aforesaid Appeal By Revenue For Assessment Year [In Short Referred To As ‘Ay’] 2012-13 Contest The Order Of Ld. Commissioner Of Income- Tax (Appeals)-36, Mumbai, [In Short Referred To As ‘Cit(A)’], Appeal No. Cit(A)-36/It-217/Acit-24(1)/15-16 Dated 26/05/2017 On Following Grounds Of Appeal: -

For Appellant: Revenue byFor Respondent: Shri Satish Chandra Rajore- Ld. DR
Section 143(3)

…be considered as capital asset for the purpose of taxation and even if it was treated as capital asset, its cost was indeterminable and the charging section would fail in terms of the decision of Hon’ble Supreme Court rendered in CIT V/s B.C.Srinivasa Shetty [128 ITR 294]. 3.2 The Learned CIT(A), after due consideration of factual matrix and assessee’s submissions concurred with the same and allowed the claim by observing as under: - 6.3. HELD: I have carefully considered the impugned assessment order, written submission of the appellant and remand report. The moot question need to be addressed is the nature of…

India Medtronic P.Ltd, Mumbai vs. DCIT (OSD) 8(2), Mumbai

ITA 2168/MUM/2014[2009-10]Status: DisposedITAT Mumbai24 Jul 2019AY 2009-10

Bench: Shri G. Manjunatha & Shri Ravish Soodita No.2168/Mum/2014 & C.O. No. 213/Mum/2014 (Arising Out Of Ita No. 2121/Mum/2014) (Assessment Year: 2009-10) India Medtronic Private Ltd. Assistant Commissioner Of 1241, Solitaire Corporate Park, Income Tax, Circle-10(1)(1), Building No.12, 209, Aaykar Bhavan, Vs. 4Th Floor, Andheri Ghatkopar Churchgate, Link Road, Andheri (East), Mumbai –20 Mumbai 400 093 Pan – Aaaci4227Q (Appellant) (Respondent) Assistant Commissioner Of M/S India Medtronic Pvt. Ltd. Income Tax (Osd)-8(2), Solitaire Corporate Park, Room No. 218, Aayakar Bhavan, Bldg. No. 12, 4Th Floor, M.K. Marg, Vs. Andheri Ghatkopar Link Rd., Mumbai – 400020 Andheri (East), Mumbai- 400093

For Appellant: Shri Rajan R. Vora, A.RFor Respondent: Shri Anand Mohan, D.R
Section 115JSection 143(1)Section 143(2)Section 143(3)Section 144C(13)Section 254

…sary checks against arbitrariness while at the same time addressing the apprehension of tax avoidance.” 64. In the absence of any machinery provision, bringing an imagined transaction to tax is not possible. The decisions in CIT v. B.C. Srinivasa Setty (1981) 128 ITR 294 (SC) and PNB Finance Ltd. v, CIT (2008) 307 ITR 75 (SC) make this position explicit. Therefore, where the existence of an international transaction involving AMP expense with an ascertainable price is- unable to be shown to exist, even if such price is nil, Chapter X provisions cannot be invoked to undertake a TP adjustment exercise. 1261 & 1238/…

Chudabhai Laxmnabhai Desai, Mehsana vs. The ITO, Ward -6(2), Ahmedabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 2867/AHD/2017[2009-10]Status: DisposedITAT Ahmedabad27 Jun 2019AY 2009-10
For Appellant: NoneFor Respondent: Shri Keyur Patel, Sr. D.R
Section 142(1)Section 143(3)Section 144Section 148Section 2(14)(iii)

…ge Chandlodia-Tal. Ahmedabad is a capital asset as per provisions of section 2(14)(iii) r.w.s 45 and the sales consideration is not exempt. In the circumstances, the ratio laid down by Hon'ble Apex Court in the case of CIT vs. B.C. Srinivasa Setty reported in 128 ITR 294 which is not applicable. Hence, ground No. 4A of appeal is dismissed.” 5. During the course of appellate proceedings before us, nobody has attended from the side of the assessee. The ld. departmental representative has supported the order of lower authorities. 6. We have heard the ld. departmental representative and perused the material on reco…

Shilpa Shetty, Mumbai vs. ACIT CC 13, Mumbai

The appeal stands partly allowed

ITA 5433/MUM/2017[2011-12]Status: DisposedITAT Mumbai25 Jun 2019AY 2011-12

Bench: Hon’Ble Shri Saktijit Dey, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri M.K. Singh-Ld. DR
Section 14ASection 92ASection 92CSection 92F

…6] 385 ITR 169 (Born HC) - Pg. 312 and 320 The Ld. AR further submitted that when the machinery provisions fail, then the charging provisions cannot be applied. In this respect, Ld. AR relied upon the decision in the case of CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294 (SC) and CIT v. Official Liquidator, Palai Central Bank Ltd. [1979] 117 ITR 676 (Ker. HC) 19. On the other hand, Ld. DR relied upon the orders passed by revenue authorities and the decision in the case of Instrumentarium's case (supra) to contend that the price was zero and the provisions of Chapter X would apply accordingly. 20. After hearing bo…

Parag Makanbhai Parsana, Jamnagar vs. Income Tax Officer, TDS-3, Jamnagar

ITA 353/RJT/2018[2014-15]Status: DisposedITAT Rajkot31 May 2019AY 2014-15

Bench: Shri Rajpal Yadav & Shri Pradip Kumar Kediasr.

For Appellant: Shri Chetan Agarwal, ARFor Respondent: Shri Praveen Verma, Sr.DR
Section 206Section 206CSection 206C(6)Section 234E

…with fee and interest is paid. The additional condition being that the statement is filed latest within one year from the due date. 21. Counsel for the petitioner however, referred to the decision of Supreme Court in case of CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294/5 Taxman 1 (SC), to contend that when a machinery provision is not provided, the levy itself would fail. The decision of Supreme Court in case of B C Srinivasa Setty (supra) was rendered in entirely different background. Issue involved was of charging capital gain on transfer of a capital asset. In case on hand, the asset was in the nature of goo…

Jayeshbhai Kanjibhai Dangariya, Jamnagar vs. Income Tax Officer, TDS-3, Jamnagar

ITA 352/RJT/2018[2014-15]Status: DisposedITAT Rajkot31 May 2019AY 2014-15

Bench: Shri Rajpal Yadav & Shri Pradip Kumar Kediasr.

For Appellant: Shri Chetan Agarwal, ARFor Respondent: Shri Praveen Verma, Sr.DR
Section 206Section 206CSection 206C(6)Section 234E

…with fee and interest is paid. The additional condition being that the statement is filed latest within one year from the due date. 21. Counsel for the petitioner however, referred to the decision of Supreme Court in case of CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294/5 Taxman 1 (SC), to contend that when a machinery provision is not provided, the levy itself would fail. The decision of Supreme Court in case of B C Srinivasa Setty (supra) was rendered in entirely different background. Issue involved was of charging capital gain on transfer of a capital asset. In case on hand, the asset was in the nature of goo…