CIT v. G Narasimhan

236 ITR 327Supreme Court of India1999#7344 most cited

What is CIT v. G Narasimhan authority for?

Accumulated profits for the purpose of deemed dividend under section 2(22)(e) are to be computed in accordance with the Income Computation and Disclosure Standards (ICDS) rather than opening balances as per Indian GAAP. This case also touches upon the definition of 'transfer' under section 2(47).

15

judgments rely on this decision, according to BharatTax’s citation analysis of 366,315 Indian tax judgments — from 2016 to 2025.

Also referred to as

CIT vs G Narasimhan · 236 ITR 327 · Section 2(22)(e) · Section 2(47) · accumulated profits · deemed dividend · ICDS · Indian GAAP · transfer · book profit · MAT

Sections most often in play

Section 143(3)Section 115JBSection 115JB(2)(i) (Explanation 1Section 115QASection 143(2)Section 2(22)(d)Section 2(22)(e)Section 2(47)

Issues it is cited on

accumulated profitssection 2(22)deemed dividendscheme of arrangementcompulsory acquisitionsection 2(47)section 2(22)(e)ddtdividend distribution taxamalgamationbeneficial ownersection 115

Judgments citing CIT v. G Narasimhan

Seabird Marine Services Private Limited, Jamnagar vs. ACIT, Circle - 1, Jamnagar, Jamangar

ITA 83/RJT/2025[2017-18]Status: DisposedITAT Rajkot30 May 2025AY 2017-18

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं./Ita No. 83/Rjt/2025 (निर्धारण वर्ष/Assessment Year: (2017-18) Seabird Marine Services Pvt. Vs. Ltd. Office No. 309 & 310, Centroid Luxuria, Nr. Crystal Mall, Khodiyar Colony, Aerodrome Road, Jamnagar 361006 Assistant Commissioner Of Income-Tax, Circle-1, Jamnagar, Aayakar Bhawan, Nr. Subhash Bridge, Jamnagar -Rajkot Highway, Jamnagar स्थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaccs 9869 C (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) Appellant By : Shri S. N. Soparkar, Ld. Ar Respondent By : Shri Sanjay Punglia, Ld. Cit-Dr Date Of Hearing : 30/04/2025 Date Of Pronouncement : 30/05/2025 Per Dr. A. L. Saini, Am: आदेश / Order Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year 2017-18, Is Directed Against The Order Passed By The National Faceless Appeal Centre (Nfac), Dehi/ Commissioner Of Income Tax (Appeal) [In Short 'Ld. Cit(A)'], Dated 02.01.2025, Which In Turn Arises Out Of An Assessment Order Passed By The Assessing Officer, Under Section 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As “The Act”), Vide Order Dated 31.12.2019. 2. Grounds Of Appeal Raised By The Assessee Are As Follows: “All The Below Mentioned Grounds Of Appeal Are Independent & Without Prejudices To Each Other.

For Appellant: Shri S. N. Soparkar, Ld. ARFor Respondent: Shri Sanjay Punglia, Ld. CIT-DR
Section 114Section 115JSection 143(3)

…nsideration for the calculation of book profit u/s 115JB of the Act. To prove the above stand, the Ld. Senior Counsel for the assessee relied on the following judgments: (i) Kartikeya vs. Sarabhai vs. CIT [1977] 94 Taxman164 (SC) (ii) CIT vs. Narasiman (1999) 236 ITR 327 (SC) (iii) PCIT vs. Juptiter Capital (P.) Ltd. [1981] 170 taxmann.com 305 (SC) (iv) Vazir Sultan Tobacoo Co. Ltd. [1981] 7 Taxman 28 (SC) (v) Southern Technologies Ltd. vs. JCIT 320 ITR 577 (SC) (vi) Vijaya Bank vs. CIT 323 ITR 166 (SC) (vii) PCIT vs. Torrent (P.) Ltd. [2019] 108 taxmann.com 375 (Guj) (viii) CIT vs. Vodafone Esar Gujarat Pvt. Ltd…

Deputy Commissioner of Income Tax Circle -2, Nagpur vs. Shri Rohan Jagdale, Nagpur

In the result, appeal of the Revenue dismissed

ITA 85/NAG/2020[2014-15]Status: DisposedITAT Nagpur06 Feb 2025AY 2014-15

Bench: Shri V. Durga Rao & Shri Khettra Mohan Roy

For Appellant: Shri K.P. Dewani, AdvocateFor Respondent: Shri Abhay Y. Marathe, Sr. DR
Section 143(2)Section 143(3)Section 2(22)(e)Section 68

…Act there remains no accumulated profit which can be considered the assessing deemed income in the hands of assessee for the impugned assessment year 2014-2015 by following the Judgment of Hon’ble Supreme Court in the case of CIT vs. G Narasimhan reported in 236 ITR 327 (SC); the decision of Kolkata High Court in the case of Shri Pradipkumar Malhotra reported in 338 ITR 538 (Cal.) and the decision of ITAT, Nagpur Bench in ITA.No.305/NAG./2016 vide order dated 10.10.2016 in the case of Shri Damodar Sarda. 4.1. Similarly, the learned CIT(A) has deleted the addition of Rs.3,36,000/- on account of rental income by…

Tata Sons Ltd, Mumbai vs. CIT 2, Mumbai

In the result, appeal of the assessee is allowed

ITA 3468/MUM/2016[2009-10]Status: DisposedITAT Mumbai23 Jan 2024AY 2009-10
Section 100Section 263Section 48

…IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No.3468/Mum/2016 (Assessment Year :2009-10) M/s. Tata Sons Limited | Vs. | Commissioner of 24, Bombay House Income Tax-2, Mumbai Homi Mody Street 344, Aaykar Bhavan Fort, Mumbai-400 001 M.K.Road Mumbai — 400 020 PAN/GIR No.AAACT4060A (Appellant) (Respondent) Assessee by i Shri J.D. Mistri / Shri Rohit | Adalji & Ms. Aastha Dhowan | Shri Ujjwalkumar Chavhan Revenue by ate of Hearing 10/11/2023 'Date of Pronouncement 23/01/2024 wear /ORDER PER AMIT SHUKLA (J.M): The af…

Legrand Nederland B.V., Mumbai vs. Asstt. Comm. of Income Tax 3(1)(2), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 2487/MUM/2022[2017-18]Status: DisposedITAT Mumbai13 Oct 2023AY 2017-18

Bench: Shri Aby T. Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blelegrand Nederland B.V. V. Acit (Intl. Taxation) – 3(1)(2) 16Th Floor, Air India Building 61/62, 6Th Floor Nariman Point, Mumbai Kalpatru Square, Kondivita Road Off. Andheri Road, Andheri (E) Mumbai - 400059 Pan: Aaccl1156B (Appellant) (Respondent) Assessee Represented By : Shri P.J. Pardiwala & Shri Prayas Jain Department Represented By : Shri Amit Kumar Soni

Section 10(34)Section 112(1)(c)Section 115Section 144C(5)Section 2(22)(d)Section 244ASection 270A

…be considered as per Indian Accounting Standard instead of considering opening balance as per Indian Generally Accepted Accounting Principles (GAAP). In view of the above and relying on the judgement of the Hon'ble Supreme Court in case of G Narsimhan [1999] 236 ITR 327 (SC), the Assessing Officer divided the entire consideration of ₹.375,20,00,000 into two parts, i.e, dividend to the extent of accumulated profits (₹.138,47,19,180) and balance amount of ₹.236,72,80,820 as consideration for the transfer of the shares Capital Gains of ₹.136,72,80,820 were determined after reducing the cost of ₹.100,00,00,000 in th…

T.L.Sritharan, Chennai vs. ACIT Non Corporate Circle-14, Chennai

In the result, appeal filed by the assessee is dismissed

ITA 1596/CHNY/2019[2014-15]Status: DisposedITAT Chennai04 Jan 2023AY 2014-15

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./Ita No.: 1596/Chny/2019 िनधा"रण वष" / Assessment Year: 2014-15 T.L. Sritharan, The Assistant Commissioner Of New No. 13, (Old No. 1), V. Income Tax, Swaminathan Street, Non-Corporate Circle -14, West Mambalam, Chennai – 600 034. Chennai – 600 033. [Pan: Aepps-6766-J] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri. R. Vijayaraghavan, Advocate & Shri. Saroj Kumar Parida, Advocate ""यथ" क" ओर से/Respondent By : Shri. Ar.V. Sreenivasan, Addl. Cit सुनवाई क" तारीख/Date Of Hearing : 22.12.2022 घोषणा क" तारीख/Date Of Pronouncement : 04.01.2023 आदेश /O R D E R

For Appellant: Shri. R. Vijayaraghavan, Advocate &For Respondent: Shri. AR.V. Sreenivasan, Addl. CIT
Section 2(47)

…lso." The assessee has relied on the following decisions in this regard: a. Decision of the High Court of Bombay in CIT vs Tata Iron and Steel Co. Ltd (1994) 206 ITR 196 (Bombay) b. Decision of the Apex Court in CIT vs G. Narasimhan (Decd.) and Others (1999) 236 ITR 327 (SC) c. Decision of the High Court of Calcutta in Central Industries Ltd vs Commissioner of Income Tax, West Bengal (1975) 99 ITR 211 (Cal) 3.9 While the first two decisions in (a) and (b), are related to what would fall under the purview of "transfer" defined by Section 2(47), the third deals with the capital loss arising on transfer of shares…

Shapoorji Pallonji Infrastructure Capital, Mumbai vs. DCIT-3(3), Mumbai

Appeal is dismissed

ITA 3906/MUM/2019[2014-15]Status: DisposedITAT Mumbai27 Dec 2022AY 2014-15
For Appellant: Shri C.S. AnanthanFor Respondent: Shri Mahita Nair
Section 143(3)Section 2(47)

…(1)(1) [ITA No. 826/MUM/2016, Assessment Year 2011-12, dated 6.02.2020], the Mumbai Bench of the Tribunal has, by relying upon the judgement of the Hon‟ble Supreme Court in the case Kartikeya V Sarabhai and Anr Vs. CIT: 228 ITR 163 (SC), CIT vs G Narasimhan: 236 ITR 327 (SC) and CIT vs Mrs Grace Collis: 248 ITR 323 (SC), allowed the claim for Long Term Capital Loss by holding that the extinguishment of rights of the shareholders as a result of reduction of share capital results in „transfer‟. 8. Per Contra, the Learned Departmental Representative relied upon the order passed by the Assessing Officer and the CIT…

Vodafone Idea Ltd (Erstwhile Aditya Birla Telecom Ltd), Mumbai vs. PCIT-Circle 5, Mumbai

ITA 662/MUM/2022[2017-18]Status: DisposedITAT Mumbai01 Dec 2022AY 2017-18

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms Kavitha Rajagopal, Hon'Blevodafone Idea Limited V. Pcit – Circle 5 {Erstwhile Known As Aditya Birla Telecom Limited} Room No. 515, 5Thfloor Birla Centurion, 10Th Floor Aayakar Bhavan, M.K. Road Plot No. 794, B Wing Mumbai - 400020 Pandurang Budhkar Marg Worli, Mumbai – 400030 Pan: Aaacb2100P (Appellant) (Respondent) Assessee Represented By Shri J. D. Mistry : Shri Madhur Aggarwal & Shri Ninad Patade Department Represented By : Shri Achal Sharma

Section 143(3)Section 263

…) Ltd. — 138 taxmann.com 52 (SC) Copy of Judgment (Digest) of Hon’ble Supreme Court in the case of 4 35 to 36 Kartikeya V. Sarabhai vs. CIT - 228 ITR 163 (SC) Copy of Judgment (Digest) of Hon’ble Supreme Court in the case of CIT 5 37 to 39 vs. G. Narasimhan - 236 ITR 327 (SC) Copy of Judgment of Hobble Madras High Court in the case of CGT vs. 6 40 to 43 td.- India co. (P) Ltd. 149 ITR 548 (Madras) Copy of Judgment of Hon’ble Madras High Court in the case of CIT vs. 7 44 to 48 Kasturi Estate (P). Ltd.- 228 ITR 376 (Madras) 23 Vodafone Idea Limited Page S.No. Particulars of the document filed Nos Copy of Judgment…

Dr. L.S. Ravi Prakash, Bangalore vs. Deputy Commissioner of Income Tax, Circle-5(1), Bangalore

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

ITA 30/BANG/2021[2011-12]Status: DisposedITAT Bangalore28 Oct 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2011-12

For Appellant: Shri G. Sathyanarayana, A.RFor Respondent: Shri Praveen Karanth, D.R
Section 78

…Supreme Court in the case of P. Sarada ((Supra)), the apex court held that the legal fiction embodied in sec. 2(22)(e) of the Act comes into play as soon as the monies are paid by the company. This view was reiterated by the Apex Court in the case reported in 236 ITR 327. (b) During the year relevant to the assessment year 2006-07, i.e., in the immediately preceding year, the company had paid a sum of Rs.77,50,000/- and the assessee had accumulated profits to the tune of Rs.55,87,174/- as on 31.3.2006. Hence the AO should have assessed the deemed dividend to the extent of accumulated profits stated above in the a…

Jp Morgan Funds, Mumbai vs. DCIT (It) 3(1)(1), Mumbai

In the result, the appeal is allowed

ITA 2430/MUM/2019[2015-16]Status: DisposedITAT Mumbai24 Jun 2022AY 2015-16
Section 143(3)Section 2(22)(b)Section 250

…uisition the same will lead to taxation of the same income (i.e. dividend) twice i.e. once as dividend and then as capital gains. In this connection, reliance is placed on a decision of the Supreme Court in the case of Commissioner of Income-tax v Narasimhan (236 ITR 327) [copy enclosed as Annexure 21. In the said case the share capital of the company was reduced by a scheme of capital reduction and the difference between the face values was paid to the shareholders. The Supreme Court held that as per section 2(22)(d) of the Act, the payment which represented accumulated profits should be regarded as dividend and…

M/S. Devanam Constructions Private Limited, Bangalore vs. The Assistant Commissioner of Income Tax, Circle- 2(1)(2), Bangalore

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

ITA 2644/BANG/2019[2014-15]Status: DisposedITAT Bangalore27 May 2022AY 2014-15

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.Nitish Ranjan, CAFor Respondent: Sri.Sankar Ganesh K, JCIT-DR
Section 143Section 143(2)Section 143(3)Section 2(22)(e)

…from the accumulated profit for the purpose of determining the deemed dividend u/s 2(22)(e) of the Act. In support of this contention, the Ld. A.R. placed his reliance on the decision rendered by Hon’ble Supreme Court in the case of CIT vs. G Narasimhan (1999)236 ITR 327 and also the decision rendered by Visakhapatnam Bench of ITAT in the case of P. Satya Prasad Vs. ITO (2013) 31 Taxmann.com 267. The Hon’ble Supreme Court in the above said case has held that when a loan given by a company to a shareholder is treated as deemed dividend u/s 2(22)(e) of the Act, it has to be treated as payment made from out of the a…

M/S Assetz Infrastructure Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-1(1)(1), Bangalore

In the result, the grounds 3

ITA 563/BANG/2019[2014-15]Status: DisposedITAT Bangalore23 Mar 2022AY 2014-15

Bench: Shri George George K. & Shri B.R. Baskaranassessment Year:2014-15

For Appellant: Shri Padam Chand Khincha, A.RFor Respondent: Smt. Priyadarshini Besaganni, D.R
Section 2(22)(e)

…from the accumulated profit for the purpose of determining the deemed dividend u/s 2(22)(e) of the Act. In support of this contention, the Ld. A.R. placed his reliance on the decision rendered by Hon’ble Supreme Court in the case of CIT vs. G Narasimhan (1999)236 ITR 327 and also the decision rendered by Visakhapatnam Bench of ITAT in the case of P. Satya Prasad Vs. ITO (2013) 31 Taxmann.com 267. The Hon’ble Supreme Court in the above said case has held that when a loan given by a company to a shareholder is treated as deemed dividend u/s 2(22)(e) of the Act, it has to be treated as payment made from out of the a…

Bhairavnath Trimbak Kadlag, Nashik vs. Assistant Commissioner of Income Tax, Nashik

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

ITA 1322/PUN/2017[2013-14]Status: DisposedITAT Pune19 Aug 2020AY 2013-14

Bench: Shri Anil Chaturvedi, Am & Shri Partha Sarathi Chaudhury, Jm आयकर अपीऱ सं. / Ita No. 1322/Pun/2017 नििाारण वषा / Assessment Year : 2013-14 Shri Bhairavnath Trimbak Kadlag, Shop No.5, Mohit Apartment, Near Janalaxmi Bank, Veer Savarkar Nagar, Jail Road, Nashik Road, Nashik-422 101 Pan: Abppk7318H .......अऩीऱाथी / Appellant बिाम / V/S. The Assistant Commissioner Of Income Tax, Circle-1, Nashik. ……प्रत्यथी / Respondent

For Appellant: Shri Sanket JoshiFor Respondent: Shri Prashant Gadekar
Section 143(2)Section 2(22)Section 2(22)(e)

…आयकर अपीऱीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE (Through Virtual Court) BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM आयकर अपीऱ सं. / ITA No. 1322/PUN/2017 नििाारण वषा / Assessment Year : 2013-14 Shri Bhairavnath Trimbak Kadlag, Shop No.5, Mohit Apartment, Near Janalaxmi Bank, Veer Savarkar Nagar, Jail Road, Nashik Road, Nashik-422 101 PAN: ABPPK7318H .......अऩीऱाथी / Appellant बिाम / V/s. The Assistant Commissioner of Income Tax, Circle-1, Nashik. ……प्रत्यथी / Respondent Assessee by : Shri Sanket Joshi Revenue by : Shri Prashant Gadekar…

Carestream Health Inc, Mumbai vs. DCIT (It) 2(1)(1), Mumbai

In the result, the appeal of assessee is allowed

ITA 826/MUM/2016[2011-12]Status: DisposedITAT Mumbai06 Feb 2020AY 2011-12

Bench: Shri M.Balaganesh, Am & Shri Amarjit Singh, Jm M/S. Carestream Health Inc Vs. Dy. Commissioner Of C/O. Carestream Health Income Tax, Range-2(1)(1) India Private Limited Scindia House, M.M.Road Sunteck Centre Ballard Pier 1St Floor, Subhash Road Mumbai – 400 028 Vile Parle (E) Mumbai – 400 057 Pan/Gir No. Aaecc6050H (Appellant) .. (Respondent)

Section 10(34)Section 115Section 144C(13)Section 144C(5)Section 2(22)(d)Section 2(47)Section 45Section 48

…ced reliance on the following judgements to support its proposition that reduction of capital amounts to „transfer‟ chargeable to tax as capital gains :- (i) Kartikeya V Sarabhai and Anr vs CIT reported in 228 ITR 163 (SC) (ii) CIT vs G Narasimhan reported in 236 ITR 327 (SC) (iii) CIT vs Mrs Grace Collis reported in 248 ITR 323 (SC) f) The assessee also placed reliance on the decision of Hon‟ble Jurisdictional High Court in the case of Sadanand S Varde and Ors vs State of Maharashtra and Ors reported in 247 ITR 609 (Bom) wherein the Hon‟ble Bombay High Court ruled that the petitioners in the name of Public Inte…

M/S Jupiter Capital Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-11(5), Bangalore

In the result, the appeal filed by the assessee is allowed

ITA 445/BANG/2018[2014-15]Status: DisposedITAT Bangalore29 Nov 2018AY 2014-15

Bench: Shri Sunil Kumar Yadav & Shri Arun Kumar Garodiaassessment Year : 2014-15

For Appellant: Shri S. Parthasarathi, AdvocateFor Respondent: Shri D. Sudhakara Rao, CIT (DR)
Section 2(47)

…oresaid observations of High Court is applicable to the assessee to conclude that even a nil consideration on capital reduction cannot defeat the computation mechanism u/s 48. We also draw your attention to the following judgments: CIT v G. Narasimhan & other 236 ITR 327 (SC) Anarkali Sarabhai v CIT 224 ITR 422 Shishir Kumar R Mehta v CIT 154 CTR 70 We also draw your attention to the decision of the Hon'ble Supreme Court in the case of CIT v Grace Collis & others 248 ITR 323 and Vania Silk Mills P Ltd v CIT 191 ITR 647. The Hon'ble bench has observed that the definition of transfer clearly contemplates extinguish…

Asst CIT CC 38, Mumbai vs. Anshul Speciality Molecules Ltd ( Formerly Knwon As Anshul Chemicals Ltd), Mumbai

The appeal of the Revenue is hereby dismissed accordingly

ITA 6369/MUM/2012[2006-07]Status: DisposedITAT Mumbai11 May 2016AY 2006-07

Bench: S/Shri B.R.Baskaran & Amarjit Singhआयकर अपील सं/ I.T.A. No.6369/Mum/2012 ("नधा"रण वष" / Assessment Year: 2006-07) Asstt. Commissioner Of M/S. Anshul Speciality बनाम/ Income Tax Cent. Cir. 38 Molecules Ltd. (Formerly Vs. R.No.32(1), Ground Floor, Known As Anshul Chemicals Aayakar Bhavan, M.K.Road, Ltd.) Mumbai - 400020 13, Aradhana Industrial Developers Corporation, Near Virwani Industrial Estate, Goregaon (East), Mumbai - 400063 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabca4003N .. (अपीलाथ" /Appellant) (""यथ" / Respondent)

For Appellant: Shri Kirit KamdarFor Respondent: Shri Somanath S. Ukkali
Section 143(2)Section 148Section 2(22)(e)

…आयकर अपील"य अ"धकरण,“ए” "यायपीठ, मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI "ी बी. आर. बा"करन, लेखा सद"य यवं "ी अमरजीत "संह, "या"यक सद"य, के सम" BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER आयकर अपील सं/ I.T.A. No.6369/Mum/2012 ("नधा"रण वष" / Assessment Year: 2006-07) Asstt. Commissioner of M/s. Anshul Speciality बनाम/ Income Tax Cent. Cir. 38 Molecules Ltd. (Formerly Vs. R.No.32(1), Ground Floor, known as Anshul Chemicals Aayakar Bhavan, M.K.Road, Ltd.) Mumbai - 400020 13, Aradhana Industrial Developers Corporation, Near Virwani Industrial Estate, Goregaon (E…

CIT v. G Narasimhan (236 ITR 327) — Cited in 15 Judgments | BharatTax