Davenport & Co. Pvt. Ltd. v. CIT

100 ITR 715Supreme Court of India1975#5638 most cited

What is Davenport & Co. Pvt. Ltd. v. CIT authority for?

Transactions settled otherwise than by actual delivery of the commodity are speculative transactions and do not fall within the purview of business or trade.

20

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2015 to 2023.

Also referred to as

Davenport & Co. Pvt. Ltd. v. CIT · speculative transaction · no delivery of goods · settlement by mutual consent · business or trade · section 24(1) · section 43(5)

Read the full judgment

Issues it is cited on

section 24(1)section 43(5)speculative transactionsection 80hsection 80hhcsection 80hhfurnishing inaccurate particularsrule 46asection 28section 43section 37(1)section 250(6)

Judgments citing Davenport & Co. Pvt. Ltd. v. CIT

Deputy Commissioner of Income Tax, Circle-1(1), Raipur vs. S.P. Buildcon Pvt. Ltd., Raipur

ITA 38/RPR/2023[2016-17]Status: DisposedITAT Raipur28 Nov 2023AY 2016-17

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am (Ita No. 35 & 38/Rpr/2023) (Assessment Year: 2014-15 & 2016-17) Deputy Commissioner Of Income Tax, V S.P. Buildcon Private Limited Circle-1(1), S Ff-06, Shyam Plaza, Pandri Bus Stand, Aayakar Bhawan, Civil Lines, Raipur Raipur Pan: Aajcs0653H (अपीलाथ" /Applicant) . (""यथ" / Respondent) . िनधा"रती क" ओर से /Assessee By : Shri Amit M. Jain, Adv. राज"व क" ओर से /Revenue By : Shri Satya Prakash Sharma, Sr. Dr सुनवाई क" तार"ख / Date Of Hearing : 05-09-2023 घोषणा क" तार"ख/Date Of Pronouncement : 28-11-2023

For Appellant: Shri Amit M. Jain, AdvFor Respondent: Shri Satya Prakash Sharma, Sr. DR
Section 143(3)Section 14ASection 2(22)(e)Section 40Section 43C

…ulative otherwise. In the case of the instant assessee, the contract is settled otherwise than actual delivery of commodity, hence it is a speculative transaction and does not come under the purview of business or trade. [Davenport Co. (P) Ltd. Vs. CIT (1975) 100 ITR 715 (SC)]. There is no delivery of goods in the case of the assessee, as the contract is settled by mutual consent to avoid delivery, hence it is a speculative transaction. 12.3 Speculative Business in the case of a company (Expl. To Section 731: This provision is applicable if the following conditions are satisfied- 1. Taxpayer is a company 2. It i…

Deputy Commissioner of Income Tax, Circle-1(1), Raipur vs. S.P. Buildcon Pvt. Ltd., Raipur

ITA 35/RPR/2023[2014-15]Status: DisposedITAT Raipur28 Nov 2023AY 2014-15

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am (Ita No. 35 & 38/Rpr/2023) (Assessment Year: 2014-15 & 2016-17) Deputy Commissioner Of Income Tax, V S.P. Buildcon Private Limited Circle-1(1), S Ff-06, Shyam Plaza, Pandri Bus Stand, Aayakar Bhawan, Civil Lines, Raipur Raipur Pan: Aajcs0653H (अपीलाथ" /Applicant) . (""यथ" / Respondent) . िनधा"रती क" ओर से /Assessee By : Shri Amit M. Jain, Adv. राज"व क" ओर से /Revenue By : Shri Satya Prakash Sharma, Sr. Dr सुनवाई क" तार"ख / Date Of Hearing : 05-09-2023 घोषणा क" तार"ख/Date Of Pronouncement : 28-11-2023

For Appellant: Shri Amit M. Jain, AdvFor Respondent: Shri Satya Prakash Sharma, Sr. DR
Section 143(3)Section 14ASection 2(22)(e)Section 40Section 43C

…ulative otherwise. In the case of the instant assessee, the contract is settled otherwise than actual delivery of commodity, hence it is a speculative transaction and does not come under the purview of business or trade. [Davenport Co. (P) Ltd. Vs. CIT (1975) 100 ITR 715 (SC)]. There is no delivery of goods in the case of the assessee, as the contract is settled by mutual consent to avoid delivery, hence it is a speculative transaction. 12.3 Speculative Business in the case of a company (Expl. To Section 731: This provision is applicable if the following conditions are satisfied- 1. Taxpayer is a company 2. It i…

Measage Gurdas Agro Private Limited, Bathinda vs. Deputy Commissioner of Income Tax Circle- 1, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 517/ASR/2019[2016-17]Status: DisposedITAT Amritsar24 May 2023AY 2016-17

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Shri Gurdas Garg, Bathinda vs. Deputy Commissioner of Income Tax Circle- 1, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 516/ASR/2019[2016-17]Status: DisposedITAT Amritsar24 May 2023AY 2016-17

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Deputy Commissioner of Income Tax Circle-1, Bathinda vs. Measage Gurdas Agro Private Limited, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 510/ASR/2019[2016-17]Status: DisposedITAT Amritsar24 May 2023AY 2016-17

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Deputy Commissioner of Income Tax Circle- 1, Bathinda vs. Shri Gurdas Garg, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 508/ASR/2019[2016-17]Status: DisposedITAT Amritsar24 May 2023AY 2016-17

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Deputy Commissioner of Income Tax Circle-1, Bathinda vs. Shri Gurdas Garg, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 507/ASR/2019[2013-14]Status: DisposedITAT Amritsar24 May 2023AY 2013-14

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Deputy Commissioner of Income Tax Circle- 1, Bathinda vs. Measage G. G Continental Traders Private Limited, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 506/ASR/2019[2013-14]Status: DisposedITAT Amritsar24 May 2023AY 2013-14

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Deputy Commissioner of Income Tax Circle-1, Bathinda vs. Measage G.G.Oils and Faits Private Limited, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 505/ASR/2019[2013-14]Status: DisposedITAT Amritsar24 May 2023AY 2013-14

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Shri Gurdas Garg, Bathinda vs. Deputy Commissioner of Income Tax Circle-1, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 498/ASR/2019[2013-14]Status: DisposedITAT Amritsar24 May 2023AY 2013-14

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Measage G. G. Continental Traders Private Limited, Bathinda vs. Deputy Commissioner of Income Tax Circle-1, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 495/ASR/2019[2013-14]Status: DisposedITAT Amritsar24 May 2023AY 2013-14

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Measage G. G. Oils and Fats Private Limited, Bathinda vs. Deputy Commissioner of Income Tax Circle- 1, Bathinda

In the result, all the appeals of the revenue are dismissed and all the appeals

ITA 494/ASR/2019[2013-14]Status: DisposedITAT Amritsar24 May 2023AY 2013-14

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250(6)

…ailable on the record. First we adjudicate the issue related to treatment of “high sea sale” which is considered by revenue as speculative transaction as there is no end delivery. The revenue relied on the order of the Davenport & Co. Pvt. Ltd. Vs. CIT (1975) 100 ITR 715 (SC). The Hon’ble Supreme Court had considered the order in the case ofNirmal Trading Co.v.Commissioner of Income-tax, [1979] 2 Taxman 420 (SC) I.T.A. Nos.506/Asr/2019 17 & Others “3. It appears the assesseeentered into several transactions of sale and purchase with different parties, and the transactions were settled by handing over delivery…

Income Tax Officer Ward-1(1), Bathinda vs. M/S Apex Fibre India Limited, Bathinda

ITA 84/ASR/2020[2016-17]Status: DisposedITAT Amritsar23 Feb 2023AY 2016-17

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 145(3)Section 43(5)Section 45(3)

…respect of Assessment Year 2016-17. 2. The Revenue has raised the following grounds of appeal in ITA No. 56/Asr/2020: “(i) The CIT(A) has erred in not taking into consideration the findings of Hon’ble Supreme Court in Davenport & Co. (P) Ltd. vs. CIT, (1975) 100 ITR 715, Nirmal Trading Co. vs. CIT (1980) 121 ITR 54, and Jute Investment Co. Ltd. vs. CIT (1980) 121 ITR wherein it was held that the transaction of transfer to delivery notes as speculative. (ii) The CIT(A) has erred in holding that the transactions under took by the assessee are not speculative in nature disregarding the definition of speculative tr…

Deputy Commissioner of Income Tax Circle-1, Bathinda vs. M/S G.H. Crop Science Private Limited, Bathinda

ITA 56/ASR/2020[2016-17]Status: DisposedITAT Amritsar23 Feb 2023AY 2016-17

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 145(3)Section 43(5)Section 45(3)

…respect of Assessment Year 2016-17. 2. The Revenue has raised the following grounds of appeal in ITA No. 56/Asr/2020: “(i) The CIT(A) has erred in not taking into consideration the findings of Hon’ble Supreme Court in Davenport & Co. (P) Ltd. vs. CIT, (1975) 100 ITR 715, Nirmal Trading Co. vs. CIT (1980) 121 ITR 54, and Jute Investment Co. Ltd. vs. CIT (1980) 121 ITR wherein it was held that the transaction of transfer to delivery notes as speculative. (ii) The CIT(A) has erred in holding that the transactions under took by the assessee are not speculative in nature disregarding the definition of speculative tr…

DCIT, CC- 8(1), Mumbai vs. Nirshilp Securities Pvt. Ltd., Mumbai

In the result, the appeal of the revenue in ITA No

ITA 6321/MUM/2019[2014-15]Status: DisposedITAT Mumbai21 Jun 2021AY 2014-15
Section 115JSection 143(3)Section 14A

…remits, wholly or in part, the performance of the promise made to him or accepts instead of it any satisfaction which he thinks fit.” In the above decision, their Lordships have also distinguished the decision in case of Davenport & Co. (P) Ltd. v. CIT [1975] 100 ITR 715 which was heavily relied upon by the ld AO in the present case. 7.9. Further we find that the ld AO in para 6.13 of his order erred in treating the impugned transaction of purchase and sale (which never fructified) as „commodity derivative‟ transactions and hence he treated it as speculative transaction as, in his opinion, it does not fit into e…

DCIT, Cir-12(2), Kolkata vs. M/S. Tega Industries Ltd., Kolkata

In the result, the Cross Objections filed by the assessee (in C

ITA 1049/KOL/2017[2011-12]Status: DisposedITAT Kolkata31 Oct 2019AY 2011-12

Bench: Shri A.T. Varkey, Jm & Dr. A. L.Saini, Am

For Appellant: DR. P. K. Srihari, CIT-DRFor Respondent: Shri Chidambaram, Advocate
Section 14ASection 92C

…of the revenue and it was distinguished. We are in respectful agreement with the observations of Mr. Justice Sen in that case at p. 849 of the report in so far as it distinguished the decision of the Supreme Court in the case of Davenport & Co. P. Ltd. [1975] 100 ITR 715. We may also refer to the decision of this court in the case of CIT v. Arun General Industries Ltd. [1977] 110 ITR 286, where all these previous decisions of this court have been noted. Except the Madras High Court in the case of R. Chinnaswami Chettiar v. CIT [1974] 96 ITR 353, all other High Courts have taken a similar view. The decision of the…

DCIT, Cir-12(2), Kolkata vs. M/S. Tega Industries Ltd., Kolkata

In the result, the Cross Objections filed by the assessee (in C

ITA 1048/KOL/2017[2010-11]Status: DisposedITAT Kolkata31 Oct 2019AY 2010-11

Bench: Shri A.T. Varkey, Jm & Dr. A. L.Saini, Am

For Appellant: DR. P. K. Srihari, CIT-DRFor Respondent: Shri Chidambaram, Advocate
Section 14ASection 92C

…of the revenue and it was distinguished. We are in respectful agreement with the observations of Mr. Justice Sen in that case at p. 849 of the report in so far as it distinguished the decision of the Supreme Court in the case of Davenport & Co. P. Ltd. [1975] 100 ITR 715. We may also refer to the decision of this court in the case of CIT v. Arun General Industries Ltd. [1977] 110 ITR 286, where all these previous decisions of this court have been noted. Except the Madras High Court in the case of R. Chinnaswami Chettiar v. CIT [1974] 96 ITR 353, all other High Courts have taken a similar view. The decision of the…

DCIT, Cir-12(2), Kolkata vs. M/S. Tega Industries Ltd., Kolkata

In the result, the Cross Objections filed by the assessee (in C

ITA 1047/KOL/2017[2009-10]Status: DisposedITAT Kolkata31 Oct 2019AY 2009-10

Bench: Shri A.T. Varkey, Jm & Dr. A. L.Saini, Am

For Appellant: DR. P. K. Srihari, CIT-DRFor Respondent: Shri Chidambaram, Advocate
Section 14ASection 92C

…of the revenue and it was distinguished. We are in respectful agreement with the observations of Mr. Justice Sen in that case at p. 849 of the report in so far as it distinguished the decision of the Supreme Court in the case of Davenport & Co. P. Ltd. [1975] 100 ITR 715. We may also refer to the decision of this court in the case of CIT v. Arun General Industries Ltd. [1977] 110 ITR 286, where all these previous decisions of this court have been noted. Except the Madras High Court in the case of R. Chinnaswami Chettiar v. CIT [1974] 96 ITR 353, all other High Courts have taken a similar view. The decision of the…

C. Bharat Kumar, Bangalore vs. ITO, Bangalore

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

ITA 123/BANG/2012[2001-02]Status: DisposedITAT Bangalore08 Jan 2016AY 2001-02

Bench: Shri Vijay Pal Rao & Shri Inturi Rama Rao

For Appellant: Shri H.N.Khincha, CAFor Respondent: Shri Nambirajan, JCIT
Section 143(3)Section 43(5)

…Vs Lakshminarayana Trading Co. after referring the decisions of the Hon’ble Supreme Court…. ITA No.123(B)/12 a. CIT Vs Puttaiah Seshaiah& Co. (1984) 146 ITR 168 (AP) b. CIT Vs Shantilal Pvt.Ltd (1983) 144 ITR 57(SC) c. Davenport & Co.Pvt.Ltd Vs CIT (1975) 100 ITR 715 (SC) d. Jute Investment Co.Ltd. Vs CIT (1980) 121 ITR 56 (SC) e.Raghunath Prasad Poddar Vs CIT (1973) 90 ITR 140(SC) f. Sind National Sugar Mills Pvt. Ltd Vs CIT (1980) 121 ITR 742(Bom.) and its earlier decisions in the case of CIT Vs Puttaiah Seshaiah & Co. (1984) 146 ITR 168 (AP) 146 ITR 168 held as follows; “After considering the definition…

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

…of the commodity contracted for. Further, as held by the Apex Court, if the transaction satisfies the condition of 'actual delivery' of the contracted commodity, the transaction cannot be held to be speculative. (Ref. Devenport and Co. P. Ltd. Vs. CIT (1975) 100 ITR 715 (SC) at Pg. 759/vol.-IV). Proviso to Sec. 43(5) not applicable:- 11. Since the main section 43(5) of the Act is not applicable to the facts of the case, the Ld. ORP erred in law in invoking. the proviso to that section. The ORP's action of invoking the proviso to Sec. 43(5) is manifestly erroneous. It is settled law that- if a contract is ultimat…

Davenport & Co. Pvt. Ltd. v. CIT (100 ITR 715) — Cited in 20 Judgments | BharatTax