CIT v. Virtual Soft Systems Ltd.

341 ITR 593High Court2012#3611 most cited

What is CIT v. Virtual Soft Systems Ltd. authority for?

A mandatory change in the method of accounting, if bonafide, allows for deductions based on the changed method when computing business income. The method of accounting for lease followed by an assessee, based on ICAI guidelines, was accepted.

33

judgments rely on this decision, according to BharatTax’s citation analysis of 366,383 Indian tax judgments — from 2013 to 2026.

Also referred to as

CIT v. Virtual Soft Systems Ltd · 341 ITR 593 · Delhi HC · method of accounting · lease accounting · ICAI guidelines · business income · deduction · bonafide change in accounting method

Also reported as

205 Taxmann 257

Sections most often in play

Section 271(1)(c)Section 274Section 143(3)Section 143(3) of the Income Tax ActSection 250Section 271(1)(c) of the Income Tax ActSection 275Section 275(1)(a)
Read the full judgment

Issues it is cited on

section 145(1)buyback of sharessection 275(1)(a)section 23aretention moneysection 211section 145(2)section 28(iv)waiver of loansection 115baasection 35dactual payment basis

Judgments citing CIT v. Virtual Soft Systems Ltd.

M/S. Bechtel India Pvt. Ltd., New Delhi vs. DCIT, New Delhi

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

ITA 882/DEL/2014[2009-10]Status: DisposedITAT Delhi14 Oct 2015AY 2009-10

Bench: Shri S.V. Mehrotra & Shri Chandra Mohan Garg

For Appellant: S/Shri S.D. Kalipa, R.R.Maurya, Praveen SharmaFor Respondent: S/Shri Ravi Jain, CIT DR, Subhakant Sahoo, Sr. DR
Section 119Section 143(3)Section 144CSection 144C(5)Section 234BSection 271(1)(c)Section 92

…Ld. DRP : i) Ignores accounting policy followed by assesee for Pg. 462-476 & 450- foreign exchange (forward) transactions. 51/P.B.Vol.-II, AS 11 & AS 30 read with AS 1. ii) The DRP ignores the judgment of Hon'b1e Delhi High Court in Virtual Soft Systems Ltd. (341 ITR 593) brought to its notice. It has been held therein that:- "10 .... the fact that the opinion of the Institute of Chartered Accountants of India was expressed in a Guidance Note which had not attained a mandatory status, would not provide a basis to the Assessing Officer to disregard the books of account of the assessee and in effect method of accou…

The Commissioner of Income Tax-II vs. M/s.Pact Securities AND Financial Services Ltd

ITTA/291/2003HC Telangana05 Feb 2015

Bench: The Commissioner Of Income Tax (Appeals), The Assessees Had Called In Question The Orders Of Assessing Officer (For Short ‘The A.O.’), Who, While Completing The Assessment For The Relevant Assessment Years Disallowed The Deduction Of The “Lease Equalization” Charges From The Lease Rental Income. The Disallowed Amounts By The Cit (Appeals) In These Appeals Are Of Rs.48,56,224/-, Rs,44,18,245/- & Rs.13,16,123/-.

Section 142Section 143Section 143(2)Section 260A

…THE HON’BLE SRI JUSTICE DILIP B.BHOSALE AND THE HON’BLE SRI JUSTICE A.RAMALINGESWARA RAO I.T.T.A. Nos.252 & 291 of 2003, 76 & 77 of 2006 and 132 & 136 of 2004 ORAL JUDGMENT: (per the Hon’ble Sri Justice Dilip B.Bhosale) The first four appeals, under Section 260A of the Income Tax Act, 1961 (for short ‘the Act’), are preferred by the Revenue. Out of which, first two appeals are against the orders dated 30-07-2002 and 29-11-2002 in I.T.A.Nos.142/HYD/2002 and 141/HYD/2002 respectively and the remaining two are against the common order dated 26-03-2002 rendered by the Income Tax Appellate…

Oracle Software India Ltd vs. Commissioner of Income Tax Del

ITA/797/2006HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…nue expenditure' must be construed in business sense and by applying sound accountancy principles unless there is statutoiy mandate to the contrary, (see Section 145 of the Act and observations of the Delhi High Court inCIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate ITANo. 25/2012-connected appeals Page 24 of32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue in nature, it exposes and brings to forefront the practice and commercial approach from the true and correct perspective…

Oracle India Pvt. Ltd vs. Commissioner of Income Tax, Delhi

ITA/417/2009HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…nue expenditure' must be construed in business sense and by applying sound accountancy principles unless there is statutoiy mandate to the contrary, (see Section 145 of the Act and observations of the Delhi High Court inCIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate ITANo. 25/2012-connected appeals Page 24 of32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue in nature, it exposes and brings to forefront the practice and commercial approach from the true and correct perspective…

Oracle Software India Ltd vs. Commissioner of Income Tax Del

ITA/951/2006HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…nue expenditure' must be construed in business sense and by applying sound accountancy principles unless there is statutoiy mandate to the contrary, (see Section 145 of the Act and observations of the Delhi High Court inCIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate ITANo. 25/2012-connected appeals Page 24 of32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue in nature, it exposes and brings to forefront the practice and commercial approach from the true and correct perspective…

Oracle India P.Ltd vs. Commissioner of Income Tax Delhi

ITA/683/2009HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…nue expenditure' must be construed in business sense and by applying sound accountancy principles unless there is statutoiy mandate to the contrary, (see Section 145 of the Act and observations of the Delhi High Court inCIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate ITANo. 25/2012-connected appeals Page 24 of32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue in nature, it exposes and brings to forefront the practice and commercial approach from the true and correct perspective…

Oracle India P.Ltd vs. Commissioner of Income Tax

ITA/287/2008HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…nue expenditure' must be construed in business sense and by applying sound accountancy principles unless there is statutoiy mandate to the contrary, (see Section 145 of the Act and observations of the Delhi High Court inCIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate ITANo. 25/2012-connected appeals Page 24 of32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue in nature, it exposes and brings to forefront the practice and commercial approach from the true and correct perspective…

Oracle Software India Ltd vs. Commissioner of Income Tax

ITA/390/2007HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…nue expenditure' must be construed in business sense and by applying sound accountancy principles unless there is statutoiy mandate to the contrary, (see Section 145 of the Act and observations of the Delhi High Court inCIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate ITANo. 25/2012-connected appeals Page 24 of32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue in nature, it exposes and brings to forefront the practice and commercial approach from the true and correct perspective…

Oracle India Pvt. Ltd vs. Commissioner of Income Tax, Delhi

ITA/461/2009HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…nue expenditure' must be construed in business sense and by applying sound accountancy principles unless there is statutoiy mandate to the contrary, (see Section 145 of the Act and observations of the Delhi High Court inCIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate ITANo. 25/2012-connected appeals Page 24 of32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue in nature, it exposes and brings to forefront the practice and commercial approach from the true and correct perspective…

Oracle Software India Ltd vs. Commissioner of Income Tax Del

ITA/961/2006HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…nue expenditure' must be construed in business sense and by applying sound accountancy principles unless there is statutoiy mandate to the contrary, (see Section 145 of the Act and observations of the Delhi High Court inCIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate ITANo. 25/2012-connected appeals Page 24 of32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue in nature, it exposes and brings to forefront the practice and commercial approach from the true and correct perspective…

Oracle India Pvt. Ltd vs. Commissioner of Income Tax, Delhi

ITA/447/2009HC Delhi25 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

…nue expenditure' must be construed in business sense and by applying sound accountancy principles unless there is statutoiy mandate to the contrary, (see Section 145 of the Act and observations of the Delhi High Court inCIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate ITANo. 25/2012-connected appeals Page 24 of32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue in nature, it exposes and brings to forefront the practice and commercial approach from the true and correct perspective…

Oracle India Private Limited vs. Commissioner of Income Tax

ITA/25/2012HC Delhi25 Nov 2013

…expenditure‟ must be construed in business sense and by applying sound accountancy principles unless there is statutory mandate to the contrary. (see Section 145 of the Act and observations of the Delhi High Court in CIT v. Virtual Soft Systems Ltd. (2012) 341 ITR 593). 27. This aforesaid principle of matching, as we shall elucidate 2013:DHC:6048-DB ITA No. 25/2012- connected appeals Page 25 of 32 below, is of immense importance and significance. When we determine whether an expenditure is capital or revenue…

CIT Large Tax Payers Unit vs. Indian Railway Finance Corp Ltd

ITA-1189/2011HC Delhi31 Oct 2013
Section 115Section 145

…account for the purposes of computing book profits under Section 115 JB ofthe Income Tax Act, 1961? 2. The said issue need not be examined in detail as it is covered against the Revenue vide decision in the case of CIT vs. Virtual Soft SystemsLimited, (2012 ) 341 ITR 593 (Delhi). ITA 1189/2011 Page 1 of 14 2013:DHC:7829-DB Issue No.2 Whether the lease equahsation charges can be reduced/taken into consideration while calculating profits under the profits and loss account provision of the income Tax Act? 3. This question is also covered by the decision of Delhi High Court in Virtual Soft Systems Limited (supra).…