CIT v. B.C. Srinivasa Shetty

2 SCC 460Supreme Court of India1981#1537 most cited

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

A transaction is not chargeable to capital gains tax if the computation provisions under Section 48 of the Income-tax Act, 1961, cannot be applied to it, meaning it was never intended by Section 45 to be subject to the charge.

74

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

CIT v. B.C. Srinivasa Shetty · section 45 · section 48 · capital gains computation · cost of acquisition · goodwill sale · chargeability to capital gains

Also reported as

128 ITR 194

Sections most often in play

Section 10(3)Section 132Section 14Section 143(3)Section 153ASection 153CSection 45Section 48

Issues it is cited on

profit split methodbright line testsection 80hhc(3)section 55(2)section 46amp expendituresection 49section 92fdoctrine of mergersection 55protective assessmentsection 80h

Judgments citing CIT v. B.C. Srinivasa Shetty

DCIT, Circle - 7(1), Kolkata vs. M/S. Britannia Industries Limited, Kolkata

ITA 1392/KOL/2017[2011-12]Status: DisposedITAT Kolkata22 Nov 2018AY 2011-12

Bench: Shri S.S.Godara & Shri, M. Balaganesh

Section 143(3)Section 92B

…he "right to sue" did not have any cost of acquisition measurable in monetary terms, computation provisions relating to capital gains were not capable of being invoked. In view of the judgment of the Supreme Court In the case of CIT Vs. B.C. Srinivasa Shetty (128 ITR 194), no capital gain was chargeable to tax when the appellant received Settlement amount of Euro 3.5 million. In the said judgment the Supreme Court observed as follows: “... Section 45 is a charging section. For the purpose of imposing the charge, Parliament has enacted detailed provisions in order to compute the profits or gains under that head. N…

DCIT, Circle - 7(1), Kolkata vs. M/S. Britannia Industries Limited, Kolkata

ITA 1391/KOL/2017[2010-11]Status: DisposedITAT Kolkata22 Nov 2018AY 2010-11

Bench: Shri S.S.Godara & Shri, M. Balaganesh

Section 143(3)Section 92B

…he "right to sue" did not have any cost of acquisition measurable in monetary terms, computation provisions relating to capital gains were not capable of being invoked. In view of the judgment of the Supreme Court In the case of CIT Vs. B.C. Srinivasa Shetty (128 ITR 194), no capital gain was chargeable to tax when the appellant received Settlement amount of Euro 3.5 million. In the said judgment the Supreme Court observed as follows: “... Section 45 is a charging section. For the purpose of imposing the charge, Parliament has enacted detailed provisions in order to compute the profits or gains under that head. N…

DCIT, Circle - 7(1), Kolkata vs. M/S. Britannia Industries Limited, Kolkata

ITA 1390/KOL/2017[2009-10]Status: DisposedITAT Kolkata22 Nov 2018AY 2009-10

Bench: Shri S.S.Godara & Shri, M. Balaganesh

Section 143(3)Section 92B

…he "right to sue" did not have any cost of acquisition measurable in monetary terms, computation provisions relating to capital gains were not capable of being invoked. In view of the judgment of the Supreme Court In the case of CIT Vs. B.C. Srinivasa Shetty (128 ITR 194), no capital gain was chargeable to tax when the appellant received Settlement amount of Euro 3.5 million. In the said judgment the Supreme Court observed as follows: “... Section 45 is a charging section. For the purpose of imposing the charge, Parliament has enacted detailed provisions in order to compute the profits or gains under that head. N…

Commissioner of Central Excise Etc vs. M/S.Aishwarya Industries Through Its Managing Director Etc

C.A. No.-006703-006710 - 2009Supreme Court13 Apr 2018

Bench: Us.

…ession used in the Tariff.” 36. Moreover, the functional utility and predominant or primary usage of the commodity which is being classified must be taken into account, apart from the understanding in common parlance. [See O.K. Play (India) Ltd. v. CCE (2005) 2 SCC 460, Alpine Industries v. CCE (2003) 3 SCC 111, Sujanil Chemo Industries v. CCE & Customs (2005) 4 SCC 189, ICPA Health Products (P) Ltd. v. CCE (2004) 4 SCC 481, Puma Ayurvedic Herbal (2006) 3 SCC 266, Ishaan Research Lab (P) Ltd. (2008) 13 SCC 349 and CCE v. Uni Products India Ltd. (2009) 9 SCC 295] 37. A commodity cannot be classified in…

Vatsala Shenoy vs. Jt.Commissioner of Income Tax

C.A. No.-001234-001234 - 2012Supreme Court18 Oct 2016
Section 260Section 583(4)(a)

…ny or a co-operative society) or otherwise, shall be chargeable to tax as the income of the firm, association or body, of the previous year in which the said transfer takes place and, for the purposes of section 48, the fair market value of the asset 4 (1981) 2 SCC 460 : 128 ITR 294 5 (2012) 345 ITR 421 (Delhi High Court) 6 (2016) 130 DTR 0222 (Kar) Page 18 JUDGMENT 18 on the date of such transfer shall be deemed to be the full value of the consideration received or accruing as a result of the transfer.” 19) Second submission of the learned senior counsel for the assessees pertained to the payment of tax on the…

Vatsala Shenoy vs. Jt.Commissioner of Income Tax

C.A. No.-001234-001234 - 2012Supreme Court18 Oct 2016
Section 260Section 583(4)(a)

…ny or a co-operative society) or otherwise, shall be chargeable to tax as the income of the firm, association or body, of the previous year in which the said transfer takes place and, for the purposes of section 48, the fair market value of the asset 4 (1981) 2 SCC 460 : 128 ITR 294 5 (2012) 345 ITR 421 (Delhi High Court) 6 (2016) 130 DTR 0222 (Kar) Page 18 JUDGMENT 18 on the date of such transfer shall be deemed to be the full value of the consideration received or accruing as a result of the transfer.” 19) Second submission of the learned senior counsel for the assessees pertained to the payment of tax on the…

Sri Pradeep Kumar Deora., Kolkata vs. D.C.I.T CC - Xxiv, Kolkata.

In the result, assessee’s appeal is allowed

ITA 281/KOL/2013[2003-04]Status: DisposedITAT Kolkata11 Dec 2015AY 2003-04

Bench: Shri Mahavir Singh & Shri Waseem Ahmed

Section 1Section 143(3)Section 68

…l contentions. We find that the issue is covered in favour of the assessee by a number of decisions of the Hon'ble Supreme Court as well as various High Courts of the country. The base decision is income CIT v. B.C. Srinivasa Shetty (1981) 128 ITR 294; (1981) 2 SCC 460 wherein the Hon'ble Supreme Court has held that all transactions encompassed by section 45 must fall within the computation provisions of section 48. If the computation as provided under section 48 could not be applied to a particular transaction, it must be regarded as “never intended by section 45 to be the subject of the charge”. The Hon'ble Sup…

Smt. Yashod Deora, Kolkata vs. ITO, Ward - 30(3), Kolkata

In the result, assessee’s appeal is allowed

ITA 835/KOL/2008[2003-04]Status: DisposedITAT Kolkata11 Dec 2015AY 2003-04

Bench: Shri Mahavir Singh & Shri Waseem Ahmed

Section 1Section 143(3)Section 68

…l contentions. We find that the issue is covered in favour of the assessee by a number of decisions of the Hon'ble Supreme Court as well as various High Courts of the country. The base decision is income CIT v. B.C. Srinivasa Shetty (1981) 128 ITR 294; (1981) 2 SCC 460 wherein the Hon'ble Supreme Court has held that all transactions encompassed by section 45 must fall within the computation provisions of section 48. If the computation as provided under section 48 could not be applied to a particular transaction, it must be regarded as “never intended by section 45 to be the subject of the charge”. The Hon'ble Sup…

Akhand Aabhar Co. Op. Hsg. Society Ltd, Mumbai vs. Asst CIT 19(3), Mumbai

In the result, the appeal is allowed

ITA 2494/MUM/2011[2002-03]Status: DisposedITAT Mumbai20 Oct 2015AY 2002-03

Bench: Shri G S Pannu, Am & Shri Sanjay Garg, Jm "नधा"रण वष" / Assessment Year : 2002 - 03 Akhand Aabhar Co-Op Hsg. Soc. Asst Cit 19(3), Ltd., Mumbai Vs Plot No.332, Tps Iii, 21St Road, Near Hotel Commando, Bandra (W) Mumbai- 400 050 Pan Aaaaa6279N (अपीलाथ" /Appellant) (""यथ"/Respondent)

For Appellant: S/Shri Vipul Joshi & S M BandiFor Respondent: Shri Sanjay Singh
Section 133ASection 147Section 2(14)Section 45Section 48

…coming to the issue whether the capital gains received by the assessee in lieu of transfer of TDR can be assessed under section 45 of the Act or not, the base decision in this respect is in the case of CIT v. B.C. Srinivasa Shetty (1981) 128 ITR 294; (1981) 2 SCC 460 wherein the Hon’ble Supreme Court has held that all transactions encompassed by section 45 must fall within the computation provisions of section 48. If the computation as provided under section 48 could not be applied to a particular transaction, it must be regarded as "never intended by section 45 to be the subject of the charge". The Hon’ble…

Commnr., Central Excise & Customs, Kerala vs. M/S. Larsen & Toubro Ltd

Appeals are disposed of

C.A. No.-006770-006770 - 2004Supreme Court20 Aug 2015

…Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity.” 34 Page 35 JUDGMENT (at para 6) 23. To similar effect is this Court’s judgment in CIT v. B.C. Srinivasa Setty, (1981) 2 SCC 460, held:- “Section 45 charges the profits or gains arising from the transfer of a capital asset to income tax. The asset must be one which falls within the contemplation of the section. It must bear that quality which brings Section 45 into play. To determine whether the goodwill of a new business is such an asset, it is per…

Commnr., Central Excise & Customs, Kerala vs. M/S. Larsen & Toubro Ltd

Appeals are disposed of

C.A. No.-006770-006770 - 2004Supreme Court20 Aug 2015

…Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity.” 34 Page 35 JUDGMENT (at para 6) 23. To similar effect is this Court’s judgment in CIT v. B.C. Srinivasa Setty, (1981) 2 SCC 460, held:- “Section 45 charges the profits or gains arising from the transfer of a capital asset to income tax. The asset must be one which falls within the contemplation of the section. It must bear that quality which brings Section 45 into play. To determine whether the goodwill of a new business is such an asset, it is per…

(Now known as Sony India Limited)

ITA/16/2014HC Delhi16 Mar 2015

…lete the intangible asset for use or sale is shown or how the intangible asset will generate probable future benefits, etc. 109. The aforesaid position finds recognition and was accepted in Commissioner of Income Tax versus B. C. Srinivasa Setty, (1981) 2 SCC 460 (SC), a decision relating transfer to goodwill. Goodwill, it was held, was a capital asset and denotes benefits arising from connection and reputation. A variety of elements go into its making and the composition varies in different trades, different businesses in the same trade, as one element may pre-dominate one business, another element…

Commnr. of Central Excise vs. M/S. Wockhardt Life Science Ltd

C.A. No.-000783-000803 - 2004Supreme Court22 Feb 2012
Section 11Section 11A

…IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.783-803 OF 2004 COMMNR. OF CENTRAL EXCISE ... APPELLANT VERSUS M/S.WOCKHARDT LIFE SCIENCES LTD...RESPONDENT O R D E R 1. These appeals are directed against the judgment and order passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Zonal Bench at Mumbai in Appeal Nos.E-1252-1271/02-MUM and E/3630-01-MUM dated 18.6.2003. By the impugned judgment and order, the Tribunal has reversed the findings and conclusions reached both by the Adjudicating Authority and the appellate authority. 2. The prima…

Commnr. of Income Tax, Mumbai vs. D.P. Sandu Bros Chembur (P) Ltd

C.A. No.-002335-002335 - 2003Supreme Court31 Jan 2005
For Respondent: D.P. Sandu Bros. Chembur (P) Ltd
Section 10(3)Section 2(24)(vi)Section 45Section 48Section 55(2)Section 56

…erty as on 1.4.1974. Both the Department and the assessee challenged the decision of the Commissioner before the Tribunal. The Tribunal relied upon the decision of this Court in Commissioner of Income Tax V. Srinivasa Setty 128 ITR 294 = (1981) 2 SCC 460 as well as the amendment to Section 55(2) of the Act in 1995 and held that the assessee did not incur any cost to acquire the leasehold rights and that if at all any cost had been incurred it was incapable of being ascertained. It was therefore held that since the capital gains could not be computed as envisaged in Section 48 of the Income…