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.

M/S.Baby Memorial Hospital Ltd, Kozhikkode vs. The ACIT, Circle-1(1), Kozhikkode

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

ITA 420/COCH/2019[2014-15]Status: DisposedITAT Cochin08 Nov 2019AY 2014-15

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 115JSection 142Section 143(3)Section 263Section 36Section 37(1)

…T Act once the asset is put to use. It was submitted that the assessee was also mandatorily required to follow AS -11 of the Accounting Standards. The Ld. AR relied on the judgment of the Supreme Court in the case of CIT Vs. Woodland Governor India Pvt Ltd (312 ITR 254) wherein it was held that loss arising on foreign exchange fluctuation has to be treated as revenue expenditure as per AS 11. The Ld. DR stated that the judgment of the Supreme Court in Woodland Governor case has two parts which deals with Revenue account cases and the other part with Capital Account cases. According to the Ld. DR, the Capital A…

DCIT, New Delhi vs. M/S Ircon International Ltd., New Delhi

In the result, all the three appeals of the assessee for A

ITA 3805/DEL/2008[2003-04]Status: DisposedITAT Delhi31 Oct 2019AY 2003-04

Bench: : Shri Bhavnesh Saini & Shri O.P. Kant

Section 80HSection 80I

…to be correct till the Assessing Officer comes to the conclusion that the estimate does not reflect true and correct profit, ld. counsel of assessee relied on the decision of the Hon’ble Supreme Court in the case of CIT Vs Woodward Governor India P Ltd(2009) 312 ITR 254 (SC). He also submitted that similar disallowance made byAssessing ITA Nos. 1825/Del/2005, 705/Del/2006 & 3804/Del/2008 AND ITA Nos. 54 2234/Del/2005 & 3805/Del/2008 Officer has been deleted by the Ld. CIT(A) in assessment year 1995- 96 and no appeal has been preferred by the Revenue against the said deletion. 16.5 On the contrary, the Ld. D…

Ircon International Ltd., New Delhi vs. DCIT, Circle-11(1), Delhi

In the result, all the three appeals of the assessee for A

ITA 705/DEL/2006[2002-2003]Status: DisposedITAT Delhi31 Oct 2019AY 2002-2003

Bench: : Shri Bhavnesh Saini & Shri O.P. Kant

Section 80HSection 80I

…to be correct till the Assessing Officer comes to the conclusion that the estimate does not reflect true and correct profit, ld. counsel of assessee relied on the decision of the Hon’ble Supreme Court in the case of CIT Vs Woodward Governor India P Ltd(2009) 312 ITR 254 (SC). He also submitted that similar disallowance made byAssessing ITA Nos. 1825/Del/2005, 705/Del/2006 & 3804/Del/2008 AND ITA Nos. 54 2234/Del/2005 & 3805/Del/2008 Officer has been deleted by the Ld. CIT(A) in assessment year 1995- 96 and no appeal has been preferred by the Revenue against the said deletion. 16.5 On the contrary, the Ld. D…

DCIT, Circle-11(1) vs. Ircon International Ltd

In the result, all the three appeals of the assessee for A

ITA 2234/DEL/2005[2001-2002]Status: DisposedITAT Delhi31 Oct 2019AY 2001-2002

Bench: : Shri Bhavnesh Saini & Shri O.P. Kant

Section 80HSection 80I

…to be correct till the Assessing Officer comes to the conclusion that the estimate does not reflect true and correct profit, ld. counsel of assessee relied on the decision of the Hon’ble Supreme Court in the case of CIT Vs Woodward Governor India P Ltd(2009) 312 ITR 254 (SC). He also submitted that similar disallowance made byAssessing ITA Nos. 1825/Del/2005, 705/Del/2006 & 3804/Del/2008 AND ITA Nos. 54 2234/Del/2005 & 3805/Del/2008 Officer has been deleted by the Ld. CIT(A) in assessment year 1995- 96 and no appeal has been preferred by the Revenue against the said deletion. 16.5 On the contrary, the Ld. D…

Ircon International Limited, New Delhi vs. ACIT, New Delhi

In the result, all the three appeals of the assessee for A

ITA 3804/DEL/2008[2003-04]Status: DisposedITAT Delhi31 Oct 2019AY 2003-04

Bench: : Shri Bhavnesh Saini & Shri O.P. Kant

Section 80HSection 80I

…to be correct till the Assessing Officer comes to the conclusion that the estimate does not reflect true and correct profit, ld. counsel of assessee relied on the decision of the Hon’ble Supreme Court in the case of CIT Vs Woodward Governor India P Ltd(2009) 312 ITR 254 (SC). He also submitted that similar disallowance made byAssessing ITA Nos. 1825/Del/2005, 705/Del/2006 & 3804/Del/2008 AND ITA Nos. 54 2234/Del/2005 & 3805/Del/2008 Officer has been deleted by the Ld. CIT(A) in assessment year 1995- 96 and no appeal has been preferred by the Revenue against the said deletion. 16.5 On the contrary, the Ld. D…

Ircon International Ltd vs. Addl. CIT, Range-11

In the result, all the three appeals of the assessee for A

ITA 1825/DEL/2005[2001-2002]Status: DisposedITAT Delhi31 Oct 2019AY 2001-2002

Bench: : Shri Bhavnesh Saini & Shri O.P. Kant

Section 80HSection 80I

…to be correct till the Assessing Officer comes to the conclusion that the estimate does not reflect true and correct profit, ld. counsel of assessee relied on the decision of the Hon’ble Supreme Court in the case of CIT Vs Woodward Governor India P Ltd(2009) 312 ITR 254 (SC). He also submitted that similar disallowance made byAssessing ITA Nos. 1825/Del/2005, 705/Del/2006 & 3804/Del/2008 AND ITA Nos. 54 2234/Del/2005 & 3805/Del/2008 Officer has been deleted by the Ld. CIT(A) in assessment year 1995- 96 and no appeal has been preferred by the Revenue against the said deletion. 16.5 On the contrary, the Ld. D…

The ACIT, Circle - 1, Rajahmundry vs. The Andhra Pradesh Paper Mills Ltd., Hyderabad

In the result, appeals filed by the Revenue are partly allowed and the cross objections filed by the assessee are partly allowed

ITA 6/VIZ/2014[2009-10]Status: DisposedITAT Visakhapatnam30 Oct 2019AY 2009-10

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri T.M. Shiv Kumar – AdvFor Respondent: Shri T.S.N. Murthy – CIT DR
Section 263Section 32

…CIT(A) after considering the provisions of section 43A and also the decision of 21 ITA Nos. 4-6/VIZ/2014 C.O.Nos.13-15/VIZ/2016 (The Andhra Pradesh Paper Mills Ltd.) the Hon'ble Supreme Court in the case of CIT Vs. Woodward Governor India Pvt. Ltd. [(2009) 312 ITR 254)] held that any positive or negative effect on the cost of the asset purchased has to be adjusted only at the time of making actual payment. Therefore, directed the Assessing Officer to verify the dates of payments and then apply section 43A. 22 Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before this Tribunal. 23 We have he…

The ACIT, Circle - 1, Rajahmundry vs. The Andhra Pradesh Paper Mills Ltd., Hyderabad

In the result, appeals filed by the Revenue are partly allowed and the cross objections filed by the assessee are partly allowed

ITA 5/VIZ/2014[2008-09]Status: DisposedITAT Visakhapatnam30 Oct 2019AY 2008-09

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri T.M. Shiv Kumar – AdvFor Respondent: Shri T.S.N. Murthy – CIT DR
Section 263Section 32

…CIT(A) after considering the provisions of section 43A and also the decision of 21 ITA Nos. 4-6/VIZ/2014 C.O.Nos.13-15/VIZ/2016 (The Andhra Pradesh Paper Mills Ltd.) the Hon'ble Supreme Court in the case of CIT Vs. Woodward Governor India Pvt. Ltd. [(2009) 312 ITR 254)] held that any positive or negative effect on the cost of the asset purchased has to be adjusted only at the time of making actual payment. Therefore, directed the Assessing Officer to verify the dates of payments and then apply section 43A. 22 Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before this Tribunal. 23 We have he…

The ACIT, Circle - 1, Rajahmundry vs. The Andhra Pradesh Paper Mills Ltd., Hyderabad

In the result, appeals filed by the Revenue are partly allowed and the cross objections filed by the assessee are partly allowed

ITA 4/VIZ/2014[2007-08]Status: DisposedITAT Visakhapatnam30 Oct 2019AY 2007-08

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri T.M. Shiv Kumar – AdvFor Respondent: Shri T.S.N. Murthy – CIT DR
Section 263Section 32

…CIT(A) after considering the provisions of section 43A and also the decision of 21 ITA Nos. 4-6/VIZ/2014 C.O.Nos.13-15/VIZ/2016 (The Andhra Pradesh Paper Mills Ltd.) the Hon'ble Supreme Court in the case of CIT Vs. Woodward Governor India Pvt. Ltd. [(2009) 312 ITR 254)] held that any positive or negative effect on the cost of the asset purchased has to be adjusted only at the time of making actual payment. Therefore, directed the Assessing Officer to verify the dates of payments and then apply section 43A. 22 Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before this Tribunal. 23 We have he…

Cavalcade Properties P. Ltd, Mumbai vs. ITO WD 12(1)(4), Mumbai

Accordingly, grounds raised by the assessee are allowed

ITA 4030/MUM/2017[2011-12]Status: DisposedITAT Mumbai30 Oct 2019AY 2011-12

Bench: Shri S. Rifaur Rahman, Am& Shri Ram Lal Negi, Jm आयकरअपीलसं./ I.T.A. No. 4030/Mum/2017 (निर्धारणवर्ा / Assessment Year: 2012-13)

For Appellant: Shri Madhur Agarwal, AR byFor Respondent: Shri Awangshi Gimson, DR
Section 115JSection 143(1)Section 143(2)

…IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, AM& SHRI RAM LAL NEGI, JM आयकरअपीलसं./ I.T.A. No. 4030/Mum/2017 (निर्धारणवर्ा / Assessment Year: 2012-13) ITO Ward 12(1)(4), M/s Cavalcade Properties Aayakar Bhavan, Pvt. Ltd. Churchgate, बिधम/ Plot No. C-30, G-Block, Mumbai-400 020 Opp-SIDBI, Bandra Kurla Vs. Complex, Bandra (east), Mumbai 400 051 स्थायीलेखासं./जीआइआरसं./PAN No. AACCC6226B (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : आयकरअपीलसं./ I.T.A. No. 4273/Mum/2017 (निर्धारणवर्ा / Assessment Year: 2012-13) ITO Ward 12(1)(4), M/s Cavalcade Properties Aayakar Bhavan, Pvt…

Sai Global Limited, Mumbai vs. Income Tax Officer 14(3)(3), Mumbai

In the result, the appeal is partly allowed

ITA 2389/MUM/2018[2014-15]Status: DisposedITAT Mumbai22 Oct 2019AY 2014-15

Bench: Shri Saktijit Dey () & Shri N.K. Pradhan () Assessment Year: 2014-15 M/S Sai Global Ltd., Income Tax Officer 14(3)(3), 11/12, Swastik Disa Mumbai, Aayakarbhavan, M.K. Vs. Business Park, Behind, Road, Mumbai-400020. Vadhani Industrial Estate, L.B.S. Marg, Opp. Damodar Park, Ghatkopar West, Mumbai-400034. Pan No. Aaacq0580A Appellant Respondent

For Appellant: Mr. Haridas Bhat, ARFor Respondent: Mr. Chaudhary Arun Kumar Singh, DR
Section 143(2)Section 143(3)

…o explain its case. In the instant case, it is ascertainable from the accounts filed by the assessee that the expenses of forex loss booked following AS-11 is an allowable expenditure. More so, because of the ratio laid down in Woodward Governer India P. Ltd. 312 ITR 254 (SC). Therefore, we delete the disallowance of Rs.2,61,873/- made by the AO on foreign exchange loss and allow the 1st ground of appeal. 7. The 2nd ground of appeal 1. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the disallowance of Rs.7,17,803/- foreign remittances made to nonresidents u/s 40(a)(i) of the…

ACIT, New Delhi vs. C 1 India Pvt. Ltd., New Delhi

In the result, all the four appeals filed by the assessee are allowed

ITA 418/DEL/2015[2009-10]Status: DisposedITAT Delhi22 Oct 2019AY 2009-10

Bench: Ms. Sushma Chowla & Dr. B.R.R.Kumarआयकर अपील सं आयकर अपील सं. / Ita Nos. 615 To 618/Del/2013 आयकर अपील सं आयकर अपील सं िनधा"रण वष" / Assessment Years: 2005-06, 2007-08 To 2009-10 िनधा"रण वष" िनधा"रण वष" िनधा"रण वष" C-1 India Pvt.Ltd., D-5, Defence Colony, New Delhi. …...........अपीलाथ"/Appellant Pan-Aabcc4078L Vs Acit, Central Circle-13, …………. ू"यथ" / Respondent New Delhi.

For Appellant: Sh. Ajay Wadhwa, AdvFor Respondent: Ms. Nidhi Srivastava, CIT DR
Section 132Section 143(3)Section 153Section 153CSection 271(1)(c)

…the order of Assessing Officer. 22. The case of the assessee before us is that the loss suffered by the assessee was an item of expenditure to be allowed u/s 37(1) of the Act. In this regard, reliance was placed on the ratio laid down by the Hon’ble [2009] 312 ITR 254(SC) and various other decisions. ITA Nos:- 615 to 618/Del/2013 & 418/Del/2015 23. The Ld.DR for the Revenue on the other hand, placed strong reliance on the orders of the authorities below and stressed that it was notional loss on the loan received and hence, it was a capital loss. 24. We have heard the rival contentions and perused the recor…

M/S. C- 1 India Pvt. Ltd., New Delhi vs. ACIT, New Delhi

In the result, all the four appeals filed by the assessee are allowed

ITA 615/DEL/2013[2005-06]Status: DisposedITAT Delhi22 Oct 2019AY 2005-06

Bench: Ms. Sushma Chowla & Dr. B.R.R.Kumarआयकर अपील सं आयकर अपील सं. / Ita Nos. 615 To 618/Del/2013 आयकर अपील सं आयकर अपील सं िनधा"रण वष" / Assessment Years: 2005-06, 2007-08 To 2009-10 िनधा"रण वष" िनधा"रण वष" िनधा"रण वष" C-1 India Pvt.Ltd., D-5, Defence Colony, New Delhi. …...........अपीलाथ"/Appellant Pan-Aabcc4078L Vs Acit, Central Circle-13, …………. ू"यथ" / Respondent New Delhi.

For Appellant: Sh. Ajay Wadhwa, AdvFor Respondent: Ms. Nidhi Srivastava, CIT DR
Section 132Section 143(3)Section 153Section 153CSection 271(1)(c)

…the order of Assessing Officer. 22. The case of the assessee before us is that the loss suffered by the assessee was an item of expenditure to be allowed u/s 37(1) of the Act. In this regard, reliance was placed on the ratio laid down by the Hon’ble [2009] 312 ITR 254(SC) and various other decisions. ITA Nos:- 615 to 618/Del/2013 & 418/Del/2015 23. The Ld.DR for the Revenue on the other hand, placed strong reliance on the orders of the authorities below and stressed that it was notional loss on the loan received and hence, it was a capital loss. 24. We have heard the rival contentions and perused the recor…

DCIT, New Delhi vs. M/S. Bbc World India (P) Ltd., New Delhi

In the result appeal of the assessee and the learned assessing officer are allowed for statistical purposes

ITA 5556/DEL/2014[2007-08]Status: DisposedITAT Delhi18 Oct 2019AY 2007-08

Bench: Shri Kuldip Singh & Shri Prashant Maharishi

Section 250Section 92C

…the ordinary principles of commercial accounting should be applied, so long as they do not conflict with any express provision of the relevant statute. The said principle was again retreated by the Hon. Supreme Court in the case of Woodward Governor in [2009] 312 ITR 254/179 Taxman 326 (SC) , wherein it held that profits for income-tax purpose are to be computed in accordance with ordinary principles of commercial accounting, unless such principles stand superseded or modified by legislative enactments. Thus, it can be said that accounting treatment of any transaction is relevant only to the extent they are not i…

Income Tax Officer Ward-4(1)(1), Bangalore vs. M/S Levis Strauss (India) Pvt Ltd, Bangalore

In the result, both the appeals by the Revenue are dismissed

ITA 2548/BANG/2018[2012-13]Status: DisposedITAT Bangalore16 Oct 2019AY 2012-13

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaran

For Appellant: Smt. Shreya Loyalka, CAFor Respondent: Smt. R. Premi, JCIT-DR(ITAT)(Bengaluru)
Section 37Section 37(1)

…d at the balance sheet date as per the requirement of Accounting Standard - 11 and is statedly an ascertained liability allowable u/s. 37(1) of the Act. This view has also been upheld by the Hon'ble Supreme Court in the case of CIT-vs-Woodward Governor (2009) 312 ITR 254 (SC)and Karnataka High Court in the case of CIT -vs- Motorola India (P.) Ltd. (2011) 200 Taxman 179. Therefore, foreign exchange loss incurred on account of restatement of trade receivables and ITA Nos.2547 and 2548/Bang/2018 Page 5 of 7 payables as on the date of balance sheet is prima-facie allowable to the Company. Considering the facts & cir…

Income Tax Officer Ward-4(1)(1), Bangalore vs. M/S Levis Strauss India Pvt Ltd, Bangalore

In the result, both the appeals by the Revenue are dismissed

ITA 2547/BANG/2018[2013-14]Status: DisposedITAT Bangalore16 Oct 2019AY 2013-14

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaran

For Appellant: Smt. Shreya Loyalka, CAFor Respondent: Smt. R. Premi, JCIT-DR(ITAT)(Bengaluru)
Section 37Section 37(1)

…d at the balance sheet date as per the requirement of Accounting Standard - 11 and is statedly an ascertained liability allowable u/s. 37(1) of the Act. This view has also been upheld by the Hon'ble Supreme Court in the case of CIT-vs-Woodward Governor (2009) 312 ITR 254 (SC)and Karnataka High Court in the case of CIT -vs- Motorola India (P.) Ltd. (2011) 200 Taxman 179. Therefore, foreign exchange loss incurred on account of restatement of trade receivables and ITA Nos.2547 and 2548/Bang/2018 Page 5 of 7 payables as on the date of balance sheet is prima-facie allowable to the Company. Considering the facts & cir…

DCIT, New Delhi vs. M/S. Hcl Comnet System & Services Ltd., New Delhi

In the result, the appeal for assessment years 2009-10 is dismissed whereas appeal for assessment year 2010-11 is partly allowed

ITA 4808/DEL/2016[2010-11]Status: DisposedITAT Delhi16 Oct 2019AY 2010-11

Bench: Shri Sudhanshu Srivastava & Shri O.P. Kantassessment Year: 2009-10 & Assessment Year: 2010-11 Dcit, Vs. M/S. Hcl Comnet System & Circle-11(1), Services Ltd., New Delhi 806, Sidharth, 96, Nehru Place, New Delhi Pan :Aaach3130M (Appellant) (Respondent)

Section 143(3)Section 14A

…required. The amendment of s. 43A by the FA 2002 w.e.f. 1.4.2003 is not clarificatory. Note: The judgement of the ITAT Special Bench in ONGC vs. ITO 83 1TD 151 has been approved by the Hon. Supreme Court in the case of C1T vs Woodward Governor India Pvt. Ltd 312 ITR 254. Respectfully, following the order of the Hon. Supreme Court in 312 ITR 254 decided in favour of the appellant. The AO is directed to allow the consequential relief.” 12.2 We have heard the rival submission of the parties on the issue in dispute. We find that the learned CIT(A) has decided the issue following the decision of the Hon’ble Supreme C…

DCIT, New Delhi vs. M/S. Hcl Comnet System & Services Ltd., New Delhi

In the result, the appeal for assessment years 2009-10 is dismissed whereas appeal for assessment year 2010-11 is partly allowed

ITA 4807/DEL/2016[2009-10]Status: DisposedITAT Delhi16 Oct 2019AY 2009-10

Bench: Shri Sudhanshu Srivastava & Shri O.P. Kantassessment Year: 2009-10 & Assessment Year: 2010-11 Dcit, Vs. M/S. Hcl Comnet System & Circle-11(1), Services Ltd., New Delhi 806, Sidharth, 96, Nehru Place, New Delhi Pan :Aaach3130M (Appellant) (Respondent)

Section 143(3)Section 14A

…required. The amendment of s. 43A by the FA 2002 w.e.f. 1.4.2003 is not clarificatory. Note: The judgement of the ITAT Special Bench in ONGC vs. ITO 83 1TD 151 has been approved by the Hon. Supreme Court in the case of C1T vs Woodward Governor India Pvt. Ltd 312 ITR 254. Respectfully, following the order of the Hon. Supreme Court in 312 ITR 254 decided in favour of the appellant. The AO is directed to allow the consequential relief.” 12.2 We have heard the rival submission of the parties on the issue in dispute. We find that the learned CIT(A) has decided the issue following the decision of the Hon’ble Supreme C…

Emmsons International Ltd., Delhi vs. ACIT Circle-8(1), New Delhi

In the result, appeal of the assessee is allowed in part

ITA 4603/DEL/2019[2012-13]Status: DisposedITAT Delhi14 Oct 2019AY 2012-13

Bench: Shri K. Narasimha Chary & Shri B.R.R. Kumar

For Appellant: Sh. Suresh Kumar Gupta, CAFor Respondent: Ms Ashima Neb, Sr. DR

…2011-12 respectively on account of application of AS-11 on the pending forward contracts as on close of financial years. During assessment proceeding, assessee relied on the decision of the Hon’ble Apex Court in the case of CIT vs Woodward Governor India Ltd 312 ITR 254 (SC) to support the contention as to the allowability of the foreign exchange loss. Ld. AO rejected the contention of the appellant on the ground that the issue of loss from foreign exchange forward contracts was not considered by the Court in the above judgment. 3. Ld. AO treated the above losses on forward contracts as notional and contingent i…

Vedanta Ltd (Earlier Known As Sterlite Industries (India) Ltd.), Gurgaon vs. ACIT, Circle- 26(1), New Delhi

The appeal of the assessee is allowed

ITA 1454/DEL/2019[2010-11]Status: DisposedITAT Delhi09 Oct 2019AY 2010-11

Bench: Shri Amit Shukla & Shri Prashant Maharishivedanta Ltd. Vs. Acit, (Earlier Known As Sterlite Circle-26(1), Industries (India) Ltd,) New Delhi Core-6, 3Rd Floor, Scope Complex, 7, Lodhi Road, New Delhi Pan: Aaccs7101B (Appellant) (Respondent)

For Appellant: Shri Sachit Jolly, AdvFor Respondent: Smt Sulekha Verma, CIT DR
Section 234BSection 263Section 271

…ent has already taken place, such as the entering into the contract and undertaking of an obligation to meet the liability, and only the consequential effect of the same is to be determined, then the liability is not a contingent liability ( woodward Governor 312 ITR 254 (SC) & Bharat Earth Movers 245 ITR 428 (SC). In following 2 verdicts delivered by the Hon’ble Rajasathan and Madras High Courts respectively. Viz. Rajasthan Sate Mines and Minerals Vs. CIT (Raj) 208 ITR101 and TN Small industries Development corporation Vs. CIT (Mad) 242 ITR 122, it was categorically held that if only estimates are made this amou…