CIT v. T.V. Sundaram Iyengar & Sons Ltd.

222 ITR 344Supreme Court of India1996#398 most cited

What is CIT v. T.V. Sundaram Iyengar & Sons Ltd. authority for?

Unclaimed deposits received in the course of trading transactions and sundry credit balances written back are taxable as business income under Section 41(1) of the Income-tax Act, 1961, as they constitute a cessation of trading liability.

223

judgments rely on this decision, according to BharatTax’s citation analysis of 367,514 Indian tax judgments — from 2002 to 2026.

Also referred to as

CIT v. T.V. Sundaram Iyengar & Sons Ltd. · 222 ITR 344 · Section 41(1) · unclaimed trading deposits · sundry credit balances written back · cessation of trading liability · taxability of income · waiver of loan applicability · business income

Sections most often in play

Section 41(1)Section 14ASection 28(iv)Section 143(3)Section 40(a)(ia)Section 115JBSection 133ASection 142(2A)
Read the full judgment

Issues it is cited on

section 2(19aa)waiver of loansection 28(iv)section 43(b)section 43(6)resulting companysection 41(1)section 43(1)section 41demergersection 32(1)(ii)written down value

Judgments citing CIT v. T.V. Sundaram Iyengar & Sons Ltd.

ACIT, Chennai vs. Balaji Distilleries Ltd., Chennai

Appeal is dismissed

ITA 1585/CHNY/2014[2009-10]Status: DisposedITAT Chennai11 Mar 2015AY 2009-10

Bench: Shri A. Mohan Alankamony & Shri S.S. Godaraआयकर अपील सं./Ita No.1585/Mds/2014 "नधा"रण वष" / Assessment Year : 2009-10 The Assistant Commissioner Of M/S Balaji Distilleries Ltd., Income Tax, V. (Merged With United Spirits) Company Circle I(2), Bye Pass Road Poonamallee, Chennai - 600 034. Chennai - 600 034. Pan : Aaacb 3589 Q (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri Pramod Nangia, CITFor Respondent: Ms. S. Sriniranjani, Advocate
Section 143(3)Section 28Section 36(1)(iii)

…case of Iskraemeco Regent Ltd. v. CIT (331 ITR 317 (Mad.), has taken similar view and upheld the claim of the assessee. In that case, the decision of the Hon'ble Supreme Court in the case of T.V. Sundaram Iyengar & - - 6 I.T.A. No.1585/Mds/2014 Sons Ltd. (222 ITR 344) was clearly distinguished. The jurisdictional High Court in the above case held as under: “(ii) That admittedly the assessee was not trading in money transactions. A grant of loan by a bank cannot be termed a trading transaction nor construed to be in the course of business. Indisputably, the assessee obtained the loan for the purpose of invest…

CIT vs. Icc India P. Ltd

The appeal is partly allowed in the above terms in terms

ITA/396/2012HC Delhi20 Nov 2012

Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE R.V.EASWAR

Section 28Section 41(1)

…pital asset, waiver thereof would not amount to any income exigible to tax. On the other hand, if this loan was for trading purpose and was treated as such from the very beginning in the books of account, as per T.V. Sundaram Iyengar and Sons Ltd. (1996) 222 ITR 344 (SC), the waiver thereof may result in the income more so when it was transferred to the profit and loss account. xxxxx xxxxx xxxxx In view of our legal discussion above, what is to be seen is as to whether the aforesaid loan was taken for trading purpose or it was to generate some capital assets. As mentioned above, the asse…

Commissioner of Income Tax vs. Mohan Meakin Ltd

ITA - 964 / 2009HC Delhi30 Jan 2012
Section 143(3)Section 201Section 260ASection 28Section 41(1)

…t makes it taxable.” Thus the aggregate amount of Rs.17,39,263/- was brought to assessment. In support of the addition, the Assessing Officer referred to and relied upon the judgment of the Supreme Court in CIT vs. T.V.Sundaram Iyengar & Sons Ltd. (1996) 222 ITR 344. 5. The assessee appealed to the CIT(A) against the aforesaid addition. It would appear that before the CIT(A) the following breakup of the addition was given:- 1. Salaries, wages and bonus 59088/- 2. Supplier’s credit balances 639005/- 3. Customer’s credit balances 433324/- 4. Uncashed cheques 197758/…

The Commissioner of Income Tax-III vs. Shri Vardhman Overseas Ltd

ITA/774/2009HC Delhi23 Dec 2011

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE R.V.EASWAR

Section 260ASection 41(1)Section 68

…the Supreme Court in the case of Chief Commissioner of Income Tax v. Kesaria Tea Co. Ltd. (2002) 254 ITR 434. It was pointed out that in this judgment the Supreme Court had considered its earlier decision in CIT v. T.V.Sundaram Iyengar & Sons Ltd. (1996) 222 ITR 344 and distinguished the same on the ground that the factual matrix and the provision of law considered therein were entirely different. A few other authorities were also cited before the Tribunal. 8. The Tribunal after taking note of the rival contentions, held that the applicability of Section 68 was ruled out since no fresh amounts were…

The Commissioner of Income Tax-III vs. Shri Vardhman Overseas Ltd

ITA-774/2009HC Delhi23 Dec 2011
Section 260ASection 41(1)Section 68

…the Supreme Court in the case of Chief Commissioner of Income Tax v. Kesaria Tea Co. Ltd. (2002) 254 ITR 434. It was pointed out that in this judgment the Supreme Court had considered its earlier decision in CIT v. T.V.Sundaram Iyengar & Sons Ltd. (1996) 222 ITR 344 and distinguished the same on the ground that the factual matrix and the provision of law considered therein were entirely different. A few other authorities were also cited before the Tribunal. 8. The Tribunal after taking note of the rival contentions, held that the applicability of Section 68 was ruled out since no fresh amounts were…

The Commissioner of Income Tax-III vs. Shri Vardhman Overseas Ltd

ITA - 774 / 2009HC Delhi23 Dec 2011
Section 260ASection 41(1)Section 68

…the Supreme Court in the case of Chief Commissioner of Income Tax v. Kesaria Tea Co. Ltd. (2002) 254 ITR 434. It was pointed out that in this judgment the Supreme Court had considered its earlier decision in CIT v. T.V.Sundaram Iyengar & Sons Ltd. (1996) 222 ITR 344 and distinguished the same on the ground that the factual matrix and the provision of law considered therein were entirely different. A few other authorities were also cited before the Tribunal. 8. The Tribunal after taking note of the rival contentions, held that the applicability of Section 68 was ruled out since no fresh amounts were…

Rollatainers Ltd vs. Commissioner of Income Tax

ITA/127/2011HC Delhi30 Aug 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 139

…case of Tosha International Ltd. (supra), neither the Tribunal nor this Court considered the issue from the stand point of principal laid down by the Supreme Court in the case of Commissioner of Income Tax Vs. T.V. Sundaram Iyengar and Sons Ltd. [(1966) 222 ITR 344. (d) In Solid Containers Ltd. Vs. Deputy Commissioner of Income Tax [(2009) 308 ITR 417], the Bombay High Court applying the decision in T.V. Sundaram Iyengar and Sons Ltd. (supra) distinguished its decision in Mahindra & Mahindra Ltd. (supra) and has held that on waiver of loan taken for business purposes, the amount is retained in th…

Rollatainers Ltd vs. Commissioner of Income Tax

ITA-127/2011HC Delhi30 Aug 2011
Section 139

…case of Tosha International Ltd. (supra), neither the Tribunal nor this Court considered the issue from the stand point of principal laid down by the Supreme Court in the case of Commissioner of Income Tax Vs. T.V. Sundaram Iyengar and Sons Ltd. [(1966) 222 ITR 344. (d) In Solid Containers Ltd. Vs. Deputy Commissioner of Income Tax [(2009) 308 ITR 417], the Bombay High Court applying the decision in T.V. Sundaram Iyengar and Sons Ltd. (supra) distinguished its decision in Mahindra & Mahindra Ltd. (supra) and has held that on waiver of loan taken for business purposes, the amount is retained in th…

The Commissioner of Income Tax II vs. Mahavir Irrigation P.Ltd

Appeal is dismissed

ITA - 1266 / 2009HC Delhi03 Aug 2011
Section 143Section 251(2)Section 271

…ms and had taken security deposits from exhibitors which was to be adjusted against receipts by way of ticket sales. This is not the case where. For the same reason the decision in Commissioner of Income-Tax v. T.V. Sundram Iyengar and Sons Ltd., [1996] 222 ITR 344 is not of any advantage to the Appellant. The question there was at what stage would a deposit of a capital nature become an income in the hands of the assessee. On our reading of the Agreement between the Appellant and DMIL, the amount of Rs.3 crores had already been accrued to them as income in the year in which it was received by the…

The Commissioner of Income Tax-II vs. Mahavir Irrigation Pvt. Ltd

Appeal is dismissed

ITA/1266/2009HC Delhi03 Aug 2011
Section 143Section 251(2)Section 271

…ms and had taken security deposits from exhibitors which was to be adjusted against receipts by way of ticket sales. This is not the case where. For the same reason the decision in Commissioner of Income-Tax v. T.V. Sundram Iyengar and Sons Ltd., [1996] 222 ITR 344 is not of any advantage to the Appellant. The question there was at what stage would a deposit of a capital nature become an income in the hands of the assessee. On our reading of the Agreement between the Appellant and DMIL, the amount of Rs.3 crores had already been accrued to them as income in the year in which it was received by the…

Commissioner of Income Tax vs. Agriculturel Market Committee

ITTA/219/2011HC Telangana27 Jun 2011

Bench: V.V.S.RAO,RAMESH RANGANATHAN

The Motor & General Finance Lt vs. Commissioner of Income Tax VI

ITA/123/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ar receipt is not income on the date when the amount is received by turn and subsequent years it can become an income in the hands of the assessee. She relied upon the judgment of the Apex Court in the case of CIT Vs. T'V' Sundram nyenEar 6r Sons Ltd.[ (1996) 222 ITR 344 ] wherein it has been specifically held:- "Although the amount received originally was not of income nature, the amounts remained with the assesse'e for a long period unclaimed by the trade parties. By lapSe of time, the claim of the deposit became time barred and the amount attained a totally different quality. lt became a definite trade surplus…

Commissioner of Income Tax Del vs. The Motor & General Finance Lt

ITA/231/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ar receipt is not income on the date when the amount is received by turn and subsequent years it can become an income in the hands of the assessee. She relied upon the judgment of the Apex Court in the case of CIT Vs. T'V' Sundram nyenEar 6r Sons Ltd.[ (1996) 222 ITR 344 ] wherein it has been specifically held:- "Although the amount received originally was not of income nature, the amounts remained with the assesse'e for a long period unclaimed by the trade parties. By lapSe of time, the claim of the deposit became time barred and the amount attained a totally different quality. lt became a definite trade surplus…

The Motor & General Finance Ltd vs. Commissioner of Income Tax Delhi

ITA/1233/2008HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…receipt is not income on the date when the amount is received by turn and subsequent years it can become an intome in the hands of the assessee. She relied upon the judgment of the Apex Court in the case of CIT Vs. T"l/. Sundram lyengar 6r Sons [-td.[ (1996) 222 ITR 344 ] wherein it has been speqlfically held:- ITA 458 of 1984 & other connected matters "Although the amount received originally was not of income nature, the amounts remained with the assessee for a long period unclaimed by the trade parties. By lapse of time, the claim of the deposit became time barred and the amount attained a totally different qu…

Commissioner of Income Tax Del vs. The Motor & General Finance Lt

ITA/209/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ar receipt is not income on the date when the amount is received by turn and subsequent years it can become an income in the hands of the assessee. She relied upon the judgment of the Apex Court in the case of CIT Vs. T'V' Sundram nyenEar 6r Sons Ltd.[ (1996) 222 ITR 344 ] wherein it has been specifically held:- "Although the amount received originally was not of income nature, the amounts remained with the assesse'e for a long period unclaimed by the trade parties. By lapSe of time, the claim of the deposit became time barred and the amount attained a totally different quality. lt became a definite trade surplus…

The Motor & General Finance Lt vs. Commissioner of Income Tax VI

ITA/117/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ar receipt is not income on the date when the amount is received by turn and subsequent years it can become an income in the hands of the assessee. She relied upon the judgment of the Apex Court in the case of CIT Vs. T'V' Sundram nyenEar 6r Sons Ltd.[ (1996) 222 ITR 344 ] wherein it has been specifically held:- "Although the amount received originally was not of income nature, the amounts remained with the assesse'e for a long period unclaimed by the trade parties. By lapSe of time, the claim of the deposit became time barred and the amount attained a totally different quality. lt became a definite trade surplus…

The Motor & General Finance Lt vs. Commissioner of Income Tax VI

ITA/124/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ar receipt is not income on the date when the amount is received by turn and subsequent years it can become an income in the hands of the assessee. She relied upon the judgment of the Apex Court in the case of CIT Vs. T'V' Sundram nyenEar 6r Sons Ltd.[ (1996) 222 ITR 344 ] wherein it has been specifically held:- "Although the amount received originally was not of income nature, the amounts remained with the assesse'e for a long period unclaimed by the trade parties. By lapSe of time, the claim of the deposit became time barred and the amount attained a totally different quality. lt became a definite trade surplus…

Logitronics Pvt Ltd vs. Commissioner of Income Tax & Anr

ITA/1623/2010HC Delhi18 Feb 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 2(24)Section 41(1)

…e case of Tosha International Ltd. (supra), neither the Tribunal nor this Court considered the issue from the stand point of principal laid down by the Supreme Court in the case of Commissioner of Income Tax Vs. T.V. Sundaram Iyengar and Sons Ltd. [(1966) 222 ITR 344. (d) In Solid Containers Ltd. Vs. Deputy Commissioner of Income Tax [(2009) 308 ITR 417], the Bombay High Court applying the decision in T.V. Sundaram Iyengar and Sons Ltd. (supra) distinguished its decision in Mahindra & Mahindra Ltd. (supra) and has held that on waiver of loan taken for business purposes, the amount is retained in…

The Commissioner of Income Tax vs. The Motor & General Finance Lt

ITA/331/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ar receipt is not income on the date when the amount is received by turn and subsequent years it can become an income in the hands of the assessee. She relied upon the judgment of the Apex Court in the case of CIT Vs. T'V' Sundram nyenEar 6r Sons Ltd.[ (1996) 222 ITR 344 ] wherein it has been specifically held:- "Although the amount received originally was not of income nature, the amounts remained with the assesse'e for a long period unclaimed by the trade parties. By lapSe of time, the claim of the deposit became time barred and the amount attained a totally different quality. lt became a definite trade surplus…

Commissioner of Income Tax Del vs. The Motor & General Finance Lt

ITA/130/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…receipt is not income on the date when the amount is received by turn and subsequent years it can become an' income in the hands of the assessee. She relied, upon the judgment of the Apex Court in the case, of CIIT Vs. Sundram Iyengar & Sons LtcL[ (1996) 222 ITR 344] wherein it has been specifically held:- "Although the amount received 'originally was not of income nature, the amounts remained with the assessee for a long period unclaimed by the trade parties. By lapse of time, the claim of the deposit became time barred and the amount attained a , totally different quality. It became a definite trade…