CIT v. Woodward Governor India Pvt. Ltd.

312 ITR 254Supreme Court of India2009#45 most cited

What is CIT v. Woodward Governor India Pvt. Ltd. authority for?

Foreign exchange fluctuations, whether gains or losses, are inextricably linked to the underlying business transaction and must be accounted for under the mercantile system. The Supreme Court also affirmed the standard accounting principle of valuing stock at cost or net realisable value, whichever is lower.

968

judgments rely on this decision, according to BharatTax’s citation analysis of 372,010 Indian tax judgments — from 2008 to 2026.

Also referred to as

CIT v. Woodward Governor · 312 ITR 254 · Section 37(1) · Section 43A · Section 145(3) · foreign exchange fluctuation · mercantile system of accounting · stock valuation · closing stock · revenue expenditure

Also reported as

21 DTR 106

Sections most often in play

Section 37(1)Section 143(3)Section 14ASection 115JBSection 147Section 142(1)Section 43(5)Section 40(a)(ia)
Read the full judgment

Issues it is cited on

section 43asection 40(a)(i)mercantile system of accountingbook profitssection 37(1)section 115jrevenue expendituresection 43capital expendituresection 40(a)section 115jbsection 32

Judgments citing CIT v. Woodward Governor India Pvt. Ltd.

Crystal Corp Protection Ltd., Delhi vs. ACIT, Circle- 5(2), New Delhi

The Appeal of the assessee is allowed

ITA 3930/DEL/2018[2013-14]Status: DisposedITAT Delhi08 Jul 2022AY 2013-14

Bench: Shri B. R. R. Kumar & Sh. Yogesh Kumar Us

…e, submitted that, the same should 3 M/s Crystal Corp Protection Ltd. be treated as written off from the books of account. The Ld. Counsel for the assessee has also relied on the judgment of Hon'ble Supreme Court in CIT Vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (SC). 4. The Ld. Counsel for the assessee further submitted that, even the statutory auditors have certified the quantum of the assessee’s provision for inventory obsolescence to conclude that the assessee has adopted scientific method for valuation. The Ld. AR has also relied on the judgment of Hon’ble Apex Court in the case of Rotork Control I…

ACIT, Circle-10(2), Kolkata vs. M/S Philips Carbon Black Ltd., Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 2628/KOL/2019[2013-14]Status: DisposedITAT Kolkata05 Jul 2022AY 2013-14

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma]

…IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA [Before Shri Rajesh Kumar, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. No. 2628/Kol/2019 Assessment Year : 2013-14 ACIT, Circle-10(2), Kolkata Vs. M/s Philips Carbon Black Ltd. (PAN: AABCP 5762 E) Appellant Respondent Date of Hearing 11.05.2022 Date of Pronouncement 05.07.2022 For the Appellant Shri Ashim Choudhury, Advocate Shri Kinjal Buria, ACA For the Respondent Shri Manish Kanojia, CITDR Shri Tushar Dhawal Singh, CITDR ORDER Per Shri Rajesh Kumar, AM: This is an appeal preferred by the revenue against the order of the Commissioner…

M/S Microland Ltd, Bangalore vs. Principal Commissioner of Income Tax, Bangalore

In the result appeal filed by assessee stands allowed

ITA 1669/BANG/2018[2014-15]Status: DisposedITAT Bangalore29 Jun 2022AY 2014-15

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2014-15 M/S. Microland Ltd., The Principal Micropolis, # 236, 92/1A, Commissioner Of Konappana Agrahara, Income Tax, Electronic City Phase – 1, Bangalore -4, Bangalore – 560 100. Bangalore. Vs. Pan: Aabcm2704P Appellant Respondent Assessee By : Shri B.K. Manjunath, Ca : Shri V.S. Chakrapani, Cit Revenue By Dr Date Of Hearing : 02-06-2022 Date Of Pronouncement : 29-06-2022 Order Per Beena Pillaipresent Appeal Has Been Filed By Assessing Against Order Dated 16/04/2018 Passed By The Ld.Pr.Cit, Under Section 263 Of The Act, For Assessment Year 2014-15 On Following Grounds Of Appeal: “1. That The Above Order Of The Commissioner Of Income Tax In So Far It Is Against The Assessee Is Against The Law, Facts, Circumstances, Natural Justice, Equity & All Other Known Principles Of Law. 2. The Cit Erred In Assuming Jurisdiction U/S 263 Without First Satisfying That The Assessment Order Suffered From An Error Which Is Prejudicial To Interest Of Revenue.

For Appellant: Shri B.K. Manjunath, CA
Section 142Section 143Section 143(1)Section 143(3)Section 263

…l to the interest of the revenue, we note that the issue on merits stands covered in favour of assessee by various decision of coordinate bench of this Tribunal and Hon’ble Supreme Court, in case of CIT vs. Woodward Governor India Pvt.Ltd., reported in (2009) 312 ITR 254. Accordingly we hold the order passed under section 263 to be bad in law and deserves to be caused and the grounds raised by the assessee stands allowed. In the result appeal filed by assessee stands allowed. Order pronounced in open court on 29th June, 2022. (CHANDRA POOJARI) Judicial Member Bangalore, Dated, the 29th June, 2022. /MS / Page 9 o…

Bellissimo Properties Development P. Ltd, Mumbai vs. Dy CIT, Central Range-7(3), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 1348/MUM/2021[2017-18]Status: DisposedITAT Mumbai28 Jun 2022AY 2017-18

Bench: Shri Amarjit Singh () & Kavitha Rajagopal ()

Section 115JSection 143(3)Section 250Section 37(1)Section 43A

…crores and stated that the said loan cannot be treated as ‘Capital loss’ as it was on account of revaluation of loans which is of revenue in nature. The Ld.AR relied on the decision of Hon’ble Supreme Court in CIT vs M/s Woodward Governor India P. Ltd (2009) 312 ITR 254 (SC). 5. The Ld.DR, on the other hand, argued that since income from gain is accepted by the department, it does not necessitate that loss pertaining to fluctuation in foreign currency exchange rate has to be allowed. The Ld.DR relied on the decision of the lower authorities. ITA 1348/MUM/2021 6. Having heard both the sides and perused the mate…

Yes Bank Limited, Mumbai vs. DCIT 2 (2)(2), Mumbai

In the result, appeal filed by the learned assessing officer in ITA number 3238/M/2018 for assessment year 2013 –

ITA 3500/MUM/2018[2013-14]Status: DisposedITAT Mumbai28 Jun 2022AY 2013-14

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Shekhar L. Gajbhiye, CIT
Section 14ASection 35DSection 40

…see. He further submitted that principle of commercial accounting should be followed in determining the tax treatment of expenses and for this proposition; he relied on the decision of Hon'ble Supreme Court in case of CIT vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (SC). In view of this, he submitted that the learned CIT (A) has erred in not admitting the additional ground of appeal and thereafter refusing allowance of deduction of discount on issue of shares under ESOP. 042. The learned Departmental Representative vehemently supported the order of the learned CIT (A) in not admitting the additional ground…

Yes Bank Ltd., Mumbai vs. DCIT 2(2)(2), Mumbai

In the result, appeal filed by the learned assessing officer in ITA number 3238/M/2018 for assessment year 2013 –

ITA 3499/MUM/2018[2012-13]Status: DisposedITAT Mumbai28 Jun 2022AY 2012-13

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Shekhar L. Gajbhiye, CIT
Section 14ASection 35DSection 40

…see. He further submitted that principle of commercial accounting should be followed in determining the tax treatment of expenses and for this proposition; he relied on the decision of Hon'ble Supreme Court in case of CIT vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (SC). In view of this, he submitted that the learned CIT (A) has erred in not admitting the additional ground of appeal and thereafter refusing allowance of deduction of discount on issue of shares under ESOP. 042. The learned Departmental Representative vehemently supported the order of the learned CIT (A) in not admitting the additional ground…

Yes Bank Limited, Mumbai vs. DCIT - 2(2)(2), Mumbai

In the result, appeal filed by the learned assessing officer in ITA number 3238/M/2018 for assessment year 2013 –

ITA 3498/MUM/2018[2011-12]Status: DisposedITAT Mumbai28 Jun 2022AY 2011-12

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Shekhar L. Gajbhiye, CIT
Section 14ASection 35DSection 40

…see. He further submitted that principle of commercial accounting should be followed in determining the tax treatment of expenses and for this proposition; he relied on the decision of Hon'ble Supreme Court in case of CIT vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (SC). In view of this, he submitted that the learned CIT (A) has erred in not admitting the additional ground of appeal and thereafter refusing allowance of deduction of discount on issue of shares under ESOP. 042. The learned Departmental Representative vehemently supported the order of the learned CIT (A) in not admitting the additional ground…

DCIT- 2(2)(2), Mumbai vs. Yes Bank Ltd., Mumbai

In the result, appeal filed by the learned assessing officer in ITA number 3238/M/2018 for assessment year 2013 –

ITA 3238/MUM/2018[2013-14]Status: DisposedITAT Mumbai28 Jun 2022AY 2013-14

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Shekhar L. Gajbhiye, CIT
Section 14ASection 35DSection 40

…see. He further submitted that principle of commercial accounting should be followed in determining the tax treatment of expenses and for this proposition; he relied on the decision of Hon'ble Supreme Court in case of CIT vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (SC). In view of this, he submitted that the learned CIT (A) has erred in not admitting the additional ground of appeal and thereafter refusing allowance of deduction of discount on issue of shares under ESOP. 042. The learned Departmental Representative vehemently supported the order of the learned CIT (A) in not admitting the additional ground…

DCIT- 2(2)(2), Mumbai vs. Yes Bank Ltd., Mumbai

In the result, appeal filed by the learned assessing officer in ITA number 3238/M/2018 for assessment year 2013 –

ITA 3237/MUM/2018[2012-13]Status: DisposedITAT Mumbai28 Jun 2022AY 2012-13

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Shekhar L. Gajbhiye, CIT
Section 14ASection 35DSection 40

…see. He further submitted that principle of commercial accounting should be followed in determining the tax treatment of expenses and for this proposition; he relied on the decision of Hon'ble Supreme Court in case of CIT vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (SC). In view of this, he submitted that the learned CIT (A) has erred in not admitting the additional ground of appeal and thereafter refusing allowance of deduction of discount on issue of shares under ESOP. 042. The learned Departmental Representative vehemently supported the order of the learned CIT (A) in not admitting the additional ground…

DCIT 2(2)(2), Mumbai vs. Yes Bank Ltd., Mumbai

In the result, appeal filed by the learned assessing officer in ITA number 3238/M/2018 for assessment year 2013 –

ITA 3236/MUM/2018[2011-12]Status: DisposedITAT Mumbai28 Jun 2022AY 2011-12

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Yogesh Thar, ARFor Respondent: Shri Shekhar L. Gajbhiye, CIT
Section 14ASection 35DSection 40

…see. He further submitted that principle of commercial accounting should be followed in determining the tax treatment of expenses and for this proposition; he relied on the decision of Hon'ble Supreme Court in case of CIT vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (SC). In view of this, he submitted that the learned CIT (A) has erred in not admitting the additional ground of appeal and thereafter refusing allowance of deduction of discount on issue of shares under ESOP. 042. The learned Departmental Representative vehemently supported the order of the learned CIT (A) in not admitting the additional ground…

The Commissioner of Income-Tax vs. M/S. Ing Vysya Bank Ltd

In the result, these appeals fail and are

ITA/312/2015HC Karnataka27 Jun 2022

Bench: P.S.DINESH KUMAR,C.M. POONACHA

Section 260

…7. The assessee has claimed a sum of Rs.2,39,38,811/- as insurance premium paid on Housing Loan Policies. The Assessing Officer held that the amount has to be spread over for a period of 17 22 312 ITR 254(SC) 23 41 SOT 290 SC) 21 years and disallowed the expenses. The CIT (Appeals) reversed the said finding. The ITAT affirming the order passed by the CIT (Appeals), has held that the premium on Housing Loans is a revenue expenditure and deduction is allowable. It is not the case of the assessing officer that the expenses are not for…

The Commissioner of Income-Tax vs. M/S. Ing Vysya Bank Ltd

In the result, these appeals fail and are

ITA/309/2015HC Karnataka27 Jun 2022

Bench: P.S.DINESH KUMAR,C.M. POONACHA

Section 260

…7. The assessee has claimed a sum of Rs.2,39,38,811/- as insurance premium paid on Housing Loan Policies. The Assessing Officer held that the amount has to be spread over for a period of 17 22 312 ITR 254(SC) 23 41 SOT 290 SC) 21 years and disallowed the expenses. The CIT (Appeals) reversed the said finding. The ITAT affirming the order passed by the CIT (Appeals), has held that the premium on Housing Loans is a revenue expenditure and deduction is allowable. It is not the case of the assessing officer that the expenses are not for…

The Commissioner of Income Tax vs. M/S Ing Vysya Bank Ltd

In the result, these appeals fail and are

ITA/350/2015HC Karnataka27 Jun 2022

Bench: P.S.DINESH KUMAR,C.M. POONACHA

Section 260

…7. The assessee has claimed a sum of Rs.2,39,38,811/- as insurance premium paid on Housing Loan Policies. The Assessing Officer held that the amount has to be spread over for a period of 17 22 312 ITR 254(SC) 23 41 SOT 290 SC) 21 years and disallowed the expenses. The CIT (Appeals) reversed the said finding. The ITAT affirming the order passed by the CIT (Appeals), has held that the premium on Housing Loans is a revenue expenditure and deduction is allowable. It is not the case of the assessing officer that the expenses are not for…

Zuari Cement Limited, Kadapa vs. Asst. Commissioner of Income Tax, Circle-1, Kadapa

Accordingly, this issue is allowed for statistical purposes

ITA 66/HYD/2019[2014-15]Status: DisposedITAT Hyderabad27 Jun 2022AY 2014-15

Bench: Shri Laliet Kumar & Shri Laxmi Prasad Sahusl.

For Appellant: Shri Deepak Chopra and Shri Nitin Narang, AdvocatesFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 143(3)

…vised liability arising on account of foreign exchange fluctuation is no longer res-integra. The issue stands covered in favour of the Assessee by way of the judgement of the Hon'ble Supreme Court in the case of CIT v. Woodward Governor India Pvt. Ltd. (2009) 312 ITR 254, where the Hon'ble SC has clearly held that forex loss arising on account of restatement of liabilities at the year end is not notional in nature and is an allowable deduction.” 65. On the other hand, ld.DR. relied upon the orders of lower authorities. 66. We have heard the rival submissions and perused the material available on record. From th…

Zuari Cement Limited, Kadapa vs. Asst. Commissioner of Income Tax, Circle-1, Kadapa

Accordingly, this issue is allowed for statistical purposes

ITA 2169/HYD/2018[2012-13]Status: DisposedITAT Hyderabad27 Jun 2022AY 2012-13

Bench: Shri Laliet Kumar & Shri Laxmi Prasad Sahusl.

For Appellant: Shri Deepak Chopra and Shri Nitin Narang, AdvocatesFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 143(3)

…vised liability arising on account of foreign exchange fluctuation is no longer res-integra. The issue stands covered in favour of the Assessee by way of the judgement of the Hon'ble Supreme Court in the case of CIT v. Woodward Governor India Pvt. Ltd. (2009) 312 ITR 254, where the Hon'ble SC has clearly held that forex loss arising on account of restatement of liabilities at the year end is not notional in nature and is an allowable deduction.” 65. On the other hand, ld.DR. relied upon the orders of lower authorities. 66. We have heard the rival submissions and perused the material available on record. From th…

Zuari Cement Limited, Kadapa vs. Asst. Commissioner of Income Tax, Circle-1(1), Kadapa

Accordingly, this issue is allowed for statistical purposes

ITA 182/HYD/2018[2013-14]Status: DisposedITAT Hyderabad27 Jun 2022AY 2013-14

Bench: Shri Laliet Kumar & Shri Laxmi Prasad Sahusl.

For Appellant: Shri Deepak Chopra and Shri Nitin Narang, AdvocatesFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 143(3)

…vised liability arising on account of foreign exchange fluctuation is no longer res-integra. The issue stands covered in favour of the Assessee by way of the judgement of the Hon'ble Supreme Court in the case of CIT v. Woodward Governor India Pvt. Ltd. (2009) 312 ITR 254, where the Hon'ble SC has clearly held that forex loss arising on account of restatement of liabilities at the year end is not notional in nature and is an allowable deduction.” 65. On the other hand, ld.DR. relied upon the orders of lower authorities. 66. We have heard the rival submissions and perused the material available on record. From th…

Zuari Cement Limited, Kadapa vs. ACIT, Circle-1, Kadapa

Accordingly, this issue is allowed for statistical purposes

ITA 254/HYD/2017[2012-13]Status: DisposedITAT Hyderabad27 Jun 2022AY 2012-13

Bench: Shri Laliet Kumar & Shri Laxmi Prasad Sahusl.

For Appellant: Shri Deepak Chopra and Shri Nitin Narang, AdvocatesFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 143(3)

…vised liability arising on account of foreign exchange fluctuation is no longer res-integra. The issue stands covered in favour of the Assessee by way of the judgement of the Hon'ble Supreme Court in the case of CIT v. Woodward Governor India Pvt. Ltd. (2009) 312 ITR 254, where the Hon'ble SC has clearly held that forex loss arising on account of restatement of liabilities at the year end is not notional in nature and is an allowable deduction.” 65. On the other hand, ld.DR. relied upon the orders of lower authorities. 66. We have heard the rival submissions and perused the material available on record. From th…

Zuari Cement Limited, Kadapa vs. ACIT, Circle-1, Kadapa

Accordingly, this issue is allowed for statistical purposes

ITA 616/HYD/2016[2011-12]Status: DisposedITAT Hyderabad27 Jun 2022AY 2011-12

Bench: Shri Laliet Kumar & Shri Laxmi Prasad Sahusl.

For Appellant: Shri Deepak Chopra and Shri Nitin Narang, AdvocatesFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 143(3)

…vised liability arising on account of foreign exchange fluctuation is no longer res-integra. The issue stands covered in favour of the Assessee by way of the judgement of the Hon'ble Supreme Court in the case of CIT v. Woodward Governor India Pvt. Ltd. (2009) 312 ITR 254, where the Hon'ble SC has clearly held that forex loss arising on account of restatement of liabilities at the year end is not notional in nature and is an allowable deduction.” 65. On the other hand, ld.DR. relied upon the orders of lower authorities. 66. We have heard the rival submissions and perused the material available on record. From th…

The Dy.Commissioner of Income Tax, Circle-1(1)(1), Vadodara vs. Ambalal Sarabhi Enterprises Limited, Vadodara

ITA 1313/AHD/2016[1999-2000]Status: DisposedITAT Ahmedabad22 Jun 2022AY 1999-2000
For Appellant: Shri Urjit Shah, Sr. D.RFor Respondent: Shri Bandish Soparkar, A.R
Section 250(6)

…cepted accounting practices is an eligible claim and the same cannot be disallowed. 9. The issue is squarely settled in favour of the assessee by the decision of the Hon’ble Apex court in Commissioner of Income Tax vs Woodward Governor India (P) Ltd. (2009) 312 ITR 254(SC). Seized with an identical issue relating to claim of loss on account of exchange fluctuation in current assets and liabilities, it was held to be an allowable claim. 10. In view of the above the disallowance of foreign exchange fluctuation of Rs.4,48,924/- is directed to be deleted. 11. Ground of appeal No.8 is dismissed. I.T.A No. 1313/Ah…

Hubergroup India Pvt. Ltd. (Formerly Known As Micro Inks Pvt. Ltd.), Vapi vs. The ACIT, Vapi Circle, Vapi

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

ITA 234/AHD/2016[2011-12]Status: DisposedITAT Surat15 Jun 2022AY 2011-12

Bench: Shri Pawan Singh & Dr. Arjun Lal Saini(Hearing In Virtual Court) Huber Group India Pvt. Assistant Commissioner Of Ltd. (Formerly Known As Income Tax, Vapi, Circle, Vs Micro Inks Pvt.Ltd.) Shivam Commercial Bilakhia House, Complex, National High Muktanand Marg, Way No.8 Vapi Chala, Vapi-396191 Pan : Aaach 7063 F Appellant / Assessee Respondent / Revenue

Section 144CSection 144C(5)Section 254(1)Section 92B

…eign exchange loss under consideration is also a capital in nature. The capital expenditure per se is not allowable as revenue expenses as per section 43A of the Act. The Ld. AR for the assessee submits that in case of CIT vs. Woodward Governor India (P.) Ltd.312 ITR 254 (SC) held that increase or decrease in liability for repayment of foreign loan in respect of acquisition of assets has to be taken into account for modifying the figures of actual cost. The assessee before the lower authorities contended that Section 43A is not applicable where machinery has been purchased from within India. The Assessing Officer…