CIT v. Bai Shirinbai K. Kooka

46 ITR 86Supreme Court of India1962#8479 most cited

What is CIT v. Bai Shirinbai K. Kooka authority for?

When a capital asset is converted into stock-in-trade, the taxable profit is determined by deducting the market value of the asset at the date of conversion from the sale proceeds, not its original cost.

13

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2015 to 2022.

Also referred to as

CIT v. Bai Shirinbai K. Kooka · conversion of capital asset to stock-in-trade · market value · cost of conversion · capital gains tax · long term capital gains · sale proceeds · business income · taxability

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Judgments citing CIT v. Bai Shirinbai K. Kooka

Mr.Rahil Mahesh Kumar Nizamuddin, Bangalore vs. Deputy Commissioner of Income Tax (International Taxation) Circle-1(2), Bangalore

In the result, the appeal of the assessee is partly allowed

ITA 892/BANG/2019[2014-15]Status: DisposedITAT Bangalore18 Jul 2022AY 2014-15

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2014-15

For Appellant: Shri K.Y. Ningoji Rao, A.RFor Respondent: Shri V.S. Chakrapani, D.R
Section 48Section 54FSection 55A

…Poojanahalli was permitted to be put to non-agricultural Residential purposes for deduction u/s Long- 48(ii) of the Act in assessing the Term Capital Gains as per principles laid down by the Supreme Court in the case of CIT v. BAI SHIRIN K. KOOKA reported in 46 ITR 86. 1,73,28,311/- 10 The Learned CIT(A) erred in upholding the assessment of the Long-Term Capital Gains arising out of the Joint Development Agreement dated 31.1.2014 for the A.Y.2014-15 even though the possession of the property bearing No.123, Infantry Road, Bengaluru was delivered on 16.6.2014 and with complete disregard to fact that the Appellant…

Pattabi Thiyagarajan, Villupuram vs. DCIT, Villupuram Circle, Villupuram

In the result, the appeal filed by the assessee is allowed for statistical purpose

ITA 247/CHNY/2019[2013-14]Status: DisposedITAT Chennai15 Feb 2022AY 2013-14

Bench: Shri Mahavir Singhand Shri G. Manjunathaआयकर अपील सं./Ita No.: 247/Chny/2019 िनधा"रण वष" /Assessment Year: 2013-14 Shri Pattabi Thiyagarajan, The Dcit, No.135, Pjn Street, V. Villupuram Circle, Tindivanam, Villupuram Villupuram – 604 001. Pan: Aaapt 3456B (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri R. Vijayaraghavan, Advocate ""यथ" क" ओर से/Respondent By : Shri R. Bhoopathy, Addl. Cit सुनवाई क" तार"ख/Date Of Hearing : 02.02.2022 घोषणा क" तार"ख/Date Of Pronouncement : 15.02.2022

For Appellant: Shri R. Vijayaraghavan, AdvocateFor Respondent: Shri R. Bhoopathy, Addl. CIT
Section 143(3)Section 45(2)Section 50C

…were transferred to the business as part of its stock. If that be so, the cost of these raw materials and semi-finished needles to the business could not be said to be nil, but, on the principle laid down by this Court in CIT vs. Bai Shirinbai K. Kooka (1962) 46 ITR 86 (SC) : TC14R.129, and subsequently followed in CIT vs. Hantapara Tea Co. ~td. (1973) 89 ITR 258 (SC) : TC17R.1227, it would be the market value of these raw materials and semi-finished needles as on 30th Sept., 1961. It is now well settled by these decisions that where an assessee converts his capital assets into stock-in-trade and starts dealing i…

ACIT, Circle- 11(2), New Delhi vs. Humboldt Wedag India Pvt. Ltd., Delhi

The appeals of the revenue are dismissed and the Cross Objections of the assessee are allowed

ITA 4664/DEL/2017[2013-14]Status: DisposedITAT Delhi07 Apr 2021AY 2013-14

Bench: Sh. Kul Bharatdr. B. R. R. Kumar(Through Video Conferencing) Ita No. 4663/Del/2017 : Asstt. Year : 2012-13 Ita No. 4664/Del/2017 : Asstt. Year : 2013-14 Acit, Vs M/S Humboldt Wedag India Pvt. Ltd. Circle-11(2), Mehtab House, A-36, Mohan Co-Op New Delhi Estate, Mathura Road, New Delhi-110044 (Appellant) (Respondent) Pan No. Aaach7474G Co No. 190/Del/2017 : Asstt. Year : 2012-13 Co No. 191/Del/2017 : Asstt. Year : 2013-14 M/S Humboldt Wedag India Pvt. Ltd. Vs Acit, Mehtab House, A-36, Mohan Co-Op Circle-11(2), Estate, Mathura Road, New Delhi New Delhi-110044 (Appellant) (Respondent) Pan No. Aaach7474G Assessee By : Sh. S. K. Aggarwal, Ca Revenue By : Ms. Vanita R. Sharma, Cit Dr Date Of Hearing: 18.03.2021 Date Of Pronouncement: 07.04.2021

For Appellant: Sh. S. K. Aggarwal, CAFor Respondent: Ms. Vanita R. Sharma, CIT DR
Section 28

…on in the Act, express or implied, against the deductibility thereof. 19. In Pondicherry Railway Co Ltd Vs CIT [1931] 5 ITC 363 (PC)/ Badridas Daga Vs CIT [1958] 34 ITR 10 (SC)/ Calcutta Co Ltd Vs CIT [1959] 37 ITR 1 (SC)/ CIT Vs Bai Shirinbai K Kooka [1962] 46 ITR 86 (SC)/ Kamalpat Motilal Vs CIT [1976] 104 ITR 783 (SC) it was held that subject to the special requirements of the Act, the profit to be assessed are the real profits and they must be ascertained on the ordinary principles of commercial trading and commercial accounting. It is thus clear that profits should be computed after deducting the losses and…

ACIT, Circle- 11(2), New Delhi vs. Humboldt Wedag India Pvt. Ltd., Delhi

The appeals of the revenue are dismissed and the Cross Objections of the assessee are allowed

ITA 4663/DEL/2017[2012-13]Status: DisposedITAT Delhi07 Apr 2021AY 2012-13

Bench: Sh. Kul Bharatdr. B. R. R. Kumar(Through Video Conferencing) Ita No. 4663/Del/2017 : Asstt. Year : 2012-13 Ita No. 4664/Del/2017 : Asstt. Year : 2013-14 Acit, Vs M/S Humboldt Wedag India Pvt. Ltd. Circle-11(2), Mehtab House, A-36, Mohan Co-Op New Delhi Estate, Mathura Road, New Delhi-110044 (Appellant) (Respondent) Pan No. Aaach7474G Co No. 190/Del/2017 : Asstt. Year : 2012-13 Co No. 191/Del/2017 : Asstt. Year : 2013-14 M/S Humboldt Wedag India Pvt. Ltd. Vs Acit, Mehtab House, A-36, Mohan Co-Op Circle-11(2), Estate, Mathura Road, New Delhi New Delhi-110044 (Appellant) (Respondent) Pan No. Aaach7474G Assessee By : Sh. S. K. Aggarwal, Ca Revenue By : Ms. Vanita R. Sharma, Cit Dr Date Of Hearing: 18.03.2021 Date Of Pronouncement: 07.04.2021

For Appellant: Sh. S. K. Aggarwal, CAFor Respondent: Ms. Vanita R. Sharma, CIT DR
Section 28

…on in the Act, express or implied, against the deductibility thereof. 19. In Pondicherry Railway Co Ltd Vs CIT [1931] 5 ITC 363 (PC)/ Badridas Daga Vs CIT [1958] 34 ITR 10 (SC)/ Calcutta Co Ltd Vs CIT [1959] 37 ITR 1 (SC)/ CIT Vs Bai Shirinbai K Kooka [1962] 46 ITR 86 (SC)/ Kamalpat Motilal Vs CIT [1976] 104 ITR 783 (SC) it was held that subject to the special requirements of the Act, the profit to be assessed are the real profits and they must be ascertained on the ordinary principles of commercial trading and commercial accounting. It is thus clear that profits should be computed after deducting the losses and…

ITO, New Delhi vs. M/S. Paragon Xt, New Delhi

In the result appeal of the revenue is dismissed

ITA 363/DEL/2015[2010-11]Status: DisposedITAT Delhi14 Mar 2019AY 2010-11

Bench: Shri Amit Shukla & Shri L.P. Sahuasstt. Year: 2010-11

For Appellant: NoneFor Respondent: Shri Surender Pal, Sr. DR
Section 194C

…. This principle has been approved by the Privy Council in Pondicherry Railway Co. Ltd. v. CIT 5 ITC 363, and by the Supreme Court in Badridas Daga v. CIT (1958) 34 ITR 10, Calcutta Co. Ltd. v. CIT (1959) 37 ITR 1 (SC) and CIT v. BaiShirinbai (K) Kooka (1962) 46 ITR 86. The profits mentioned herein are the real profits and they must be ascertained on ordinary principles of commercial practice and commercial accounting. Therefore, the assessee's method of accounting becomes relevant for determining the income from the conduct of any business or exercise of any profession. The assessee, in this case, is rendering s…

Skylark Build, Mumbai vs. Asst CIT Cen Cir 4(2), Mumbai

ITA 4370/MUM/2015[2007-08]Status: DisposedITAT Mumbai29 Aug 2018AY 2007-08

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year: 2007-08 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K Assessment Year: 2008-09 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K

…uld misunderstand, had been regarded as a principle of general application, and there is a catena of cases of this court which affirms that principle. Reference may be made to Calcutta Co. Ltd. v. CIT [1959] 37 ITR 1 (SC), CIT v. Bai Shirinbai K. Kooka [1962] 46 ITR 86 (SC), Poona Electric Supply Co. Ltd. v. CIT [1965] 57 ITR 521 (SC), CIT v. Birla Gwalior (P.) Ltd. [1973] 89 ITR 266 (SC) and Bafna Textiles v. ITO [1975] 98 ITR 1 (Kar). What is the profit or gains which can be said to accrue or arise to the assessee when lie makes over his personal asset to the partnership firm as his contribution to its capital…

Skylark Build, Mumbai vs. Asst CIT Cen Cir 4(2), Mumbai

ITA 3237/MUM/2015[2008-09]Status: DisposedITAT Mumbai29 Aug 2018AY 2008-09

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year: 2007-08 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K Assessment Year: 2008-09 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K

…uld misunderstand, had been regarded as a principle of general application, and there is a catena of cases of this court which affirms that principle. Reference may be made to Calcutta Co. Ltd. v. CIT [1959] 37 ITR 1 (SC), CIT v. Bai Shirinbai K. Kooka [1962] 46 ITR 86 (SC), Poona Electric Supply Co. Ltd. v. CIT [1965] 57 ITR 521 (SC), CIT v. Birla Gwalior (P.) Ltd. [1973] 89 ITR 266 (SC) and Bafna Textiles v. ITO [1975] 98 ITR 1 (Kar). What is the profit or gains which can be said to accrue or arise to the assessee when lie makes over his personal asset to the partnership firm as his contribution to its capital…

DCIT Cen Cir 4(2), Mumbai vs. Sudhakar M. Shetty, Mumbai

ITA 2906/MUM/2015[2011-12]Status: DisposedITAT Mumbai29 Aug 2018AY 2011-12

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year: 2007-08 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K Assessment Year: 2008-09 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K

…uld misunderstand, had been regarded as a principle of general application, and there is a catena of cases of this court which affirms that principle. Reference may be made to Calcutta Co. Ltd. v. CIT [1959] 37 ITR 1 (SC), CIT v. Bai Shirinbai K. Kooka [1962] 46 ITR 86 (SC), Poona Electric Supply Co. Ltd. v. CIT [1965] 57 ITR 521 (SC), CIT v. Birla Gwalior (P.) Ltd. [1973] 89 ITR 266 (SC) and Bafna Textiles v. ITO [1975] 98 ITR 1 (Kar). What is the profit or gains which can be said to accrue or arise to the assessee when lie makes over his personal asset to the partnership firm as his contribution to its capital…

Mahaveer Yadav, Jaipur vs. ITO, Jaipur

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

ITA 209/JPR/2017[2011-12]Status: DisposedITAT Jaipur27 Feb 2018AY 2011-12
For Appellant: Shri P.C. Parwal (CA)For Respondent: Smt. Neena Jeph (Addl.CIT)
Section 2(14)

…were transferred to the business as part of its stock. If that be so, the cost of these raw materials and semi-finished needles to the business could not be said to be nil, but, on the principle laid down by this Court in CIT vs. Bai Shirinbai K. Kooka (1962) 46 ITR 86 (SC) : TC14R.129, and subsequently followed in CIT vs. Hantapara Tea Co. Ltd. (1973) 89 ITR 258 (SC) : TC17R.1227, it would be the market value of these raw materials and semi-finished needles as on 30th Sept., 1961. It is now well settled by these decisions that where an assessee converts his capital assets into stock- in-trade and starts dealing…

Pradeep Vatrana, Alwar vs. DCIT, Alwar

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 930/JPR/2016[2012-13]Status: DisposedITAT Jaipur27 Feb 2018AY 2012-13
For Appellant: Shri P.C. Parwal (CA)For Respondent: Shri P. P. Meena (JCIT)
Section 54

…were transferred to the business as part of its stock. If that be so, the cost of these raw materials and semi-finished needles to the business could not be said to be nil, but, on the principle laid down by this Court in CIT vs. Bai Shirinbai K. Kooka (1962) 46 ITR 86 (SC) : TC14R.129, and subsequently followed in CIT vs. Hantapara Tea Co. Ltd. (1973) 89 ITR 258 (SC) : TC17R.1227, it would be the market value of these raw materials and semi-finished needles as on 30th Sept., 1961. It is now well settled by these decisions that where an assessee converts his capital assets into stock- in-trade and starts dealing…

ITO, WD-12(1), Kolkata vs. M/S White Cliff Properties (P) Ltd., Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 1511/KOL/2015[2006-07]Status: DisposedITAT Kolkata10 Nov 2017AY 2006-07

Bench: Sri J. Sudhakar Reddy & Sri S.S. Viswanethra Ravi

Section 143(3)Section 251

…ould misunderstand, had been regarded as a principle of general application, and there is a catena of cases of this court which affirms that principle. Reference may be made to Calcutta Co. Ltd. vs. CIT [1959] 37 ITR 1 (SC), CIT vs. Bai Shirinbai Kooka [1962] 46 ITR 86 (SC), Poona Electric Supply Co. Ltd. vs. CIT [1965] 57 ITR 521 (SC), CIT vs. Birla Gwalior (P) Ltd. [1973] 89 ITR 266 (SC) and Batna Textiles vs. ITO [1975] 98 ITR 1 (Ker).” 22. In this case, it cannot be said that the right to receive accrued, before the start of construction and before the happening of certain contingencies and fulfilment of cond…

DCIT, Jaipur vs. M/S Goverdhan Builders Pvt. Ltd., Jaipur

In the result, ground No. 2 of the

ITA 454/JPR/2012[2007-08]Status: DisposedITAT Jaipur10 Apr 2017AY 2007-08
For Appellant: Shri Varindar Mehta (CIT)For Respondent: Shri P.C. Parwal (CA)
Section 45(2)

…cond issue regarding substitution of the land cost by fair market value of such land cost as on the date of conversion for the purposes of computing the business profits. In this regard, the Hon’ble Supreme Court in case CIT vs. Bai Shirinbai K. Kooka [1962] 46 ITR 86 has held that the assessable profit as business profit would be the difference between the sale price of stock-in-trade and Fair Market Value so converted/treated in/as stock-in-trade prevailing on the date when such conversion takes place. In instant case, we find that the AO while computing the business profits has not considered such fair ma…

Asst CIT 16(3), Mumbai vs. Jogani & Dialani Land Developers & Builders, Mumbai

In the result appeal of the Revenue is dismissed

ITA 337/MUM/2014[2009-10]Status: DisposedITAT Mumbai16 Dec 2015AY 2009-10

Bench: Shri R.C. Sharma & Shri Sandeep Gosain

Section 112Section 143(3)

…rade for being held as capital asset. It was held that the assessee was entitled to convert an asset which was originally held as stock-in-trade into an investment. Page 5 of 12 ITA no.337/Mum./2014 6 (Assessment Year : 2009-10) ii) Bai Shirinbai K. Kooka, 46 ITR 86 (SC) - In this case of a converse situation, the asessee who was holding the shares as an investment asset had converted the investment in shares into stock in trade on becoming a dealer in shares. It was held that the shares held as investment which later on could be converted into stock-in-trade and sold, resulting into business income. 2.4.8 To…

CIT v. Bai Shirinbai K. Kooka (46 ITR 86) — Cited in 13 Judgments | BharatTax