E.D. Sassoon & Co. Ltd. v. CIT

26 ITR 27Supreme Court of India1954#326 most cited

What is E.D. Sassoon & Co. Ltd. v. CIT authority for?

Income is taxable only when it represents real income, not notional income. It accrues only when there is a vested right to receive it, typically upon the occurrence of a transfer or event, rather than merely on a time basis.

256

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 1992 to 2026.

Also referred to as

E.D. Sassoon & Co. Ltd. v. CIT · 26 ITR 27 · Supreme Court · real income principle · notional income · income accrual · right to receive income · section 48 · capital gains computation · timing of tax liability · mercantile system · section 145

Also reported as

1 SCR 313

Sections most often in play

Section 143(3)Section 250Section 143(2)Section 36(1)(va)Section 48Section 115JBSection 142(1)Section 143(1)
Read the full judgment

Issues it is cited on

right to receivesection 145(2)mercantile system of accountingsection 48section 45section 34liable to taxbook profitsprofits and gains of business or professionsection 145section 115jrevenue expenditure

Judgments citing E.D. Sassoon & Co. Ltd. v. CIT

Delicate Realtors Pvt. Ltd., New Delhi vs. ACIT, New Delhi

In the result, all the three appeals filed by the respective assessees are allowed

ITA 3253/DEL/2015[2011-12]Status: DisposedITAT Delhi04 Oct 2017AY 2011-12

Bench: Shri R. K. Panda & Ms Suchitra Kamblei.T.A .No. 3185/Del/2015 (A.Y .2011-12)

Section 132Section 234BSection 68

…essee companies being owner of the land. According to the assesee, it has right to forfeit and that right has not been exercised and money is already with the assesee. Relying upon E.D. Sassoon & Company Ltd, And Others vs. Commissioner of Income-Tax, (1954) 26 ITR 27 which has been quoted in P.O. & W. Sawoo Pvt. Ltd. & Anr. Vs ACIT (supra) the accrual or right to receive is before receipt. Here receipt has already been taken. Alternatively, the receipt is revenue in character because it was received in connection with the business because none of the assessee company was ever owner of the so called land. The ac…

Pavitra Realcon Pvt. Ltd., New Delhi vs. ACIT, New Delhi

In the result, all the three appeals filed by the respective assessees are allowed

ITA 3185/DEL/2015[2011-12]Status: DisposedITAT Delhi04 Oct 2017AY 2011-12

Bench: Shri R. K. Panda & Ms Suchitra Kamblei.T.A .No. 3185/Del/2015 (A.Y .2011-12)

Section 132Section 234BSection 68

…essee companies being owner of the land. According to the assesee, it has right to forfeit and that right has not been exercised and money is already with the assesee. Relying upon E.D. Sassoon & Company Ltd, And Others vs. Commissioner of Income-Tax, (1954) 26 ITR 27 which has been quoted in P.O. & W. Sawoo Pvt. Ltd. & Anr. Vs ACIT (supra) the accrual or right to receive is before receipt. Here receipt has already been taken. Alternatively, the receipt is revenue in character because it was received in connection with the business because none of the assessee company was ever owner of the so called land. The ac…

Commissioner of Income Tax vs. Balbir Singh Maini

The appeals are dismissed with no order as to

C.A. No.-015619-015619 - 2017Supreme Court04 Oct 2017

Bench: HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN

…REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 15619 OF 2017 (ARISING OUT OF SLP (CIVIL) NO.35248 OF 2015) Commissioner of Income Tax … Appellant Versus Balbir Singh Maini … Respondent WITH CIVIL APPEAL NO. 15622 OF 2017 (ARISING OUT OF SLP (CIVIL) NO.35252 OF 2015) CIVIL APPEAL NO. 15624 OF 2017 (ARISING OUT OF SLP (CIVIL) NO.561 OF 2016) CIVIL APPEAL NO. 15620 OF 2017 (ARISING OUT OF SLP (CIVIL) NO.35250 OF 2015) CIVIL APPEAL NO. 15639 OF 2017 (ARISING OUT OF SLP (CIVIL) NO.585 OF 2016) CIVIL APPEAL NO. 15637 OF 2017 (ARISING OUT OF SLP (CIVIL)…

CIT vs. Jagdish Prasad Gupta

ITA/933/2011HC Delhi18 Aug 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 260A

…. (2013) 358 ITR 295 (SC) and E.D. ITA 711/2011 & batch matters Page 25 of 39 Sassoon & Company Ltd. and Ors. v. CIT, Bombay City [1954] 26 ITR 27 (SC). 36. In support of his plea that, when there is a mercantile basis of maintenance of books of accounts, the same principles would have to apply for allowing the claim on accrual basis reliance was placed on CIT v. Woodward Governor India P. Ltd. [2009] 312 ITR 247 (SC); Keshav Mills Ltd. v. Commissioner of Income Tax, Bombay [1953] 23…

CIT vs. Jagdish Prasad Gupta

ITA/935/2011HC Delhi18 Aug 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 260A

…. (2013) 358 ITR 295 (SC) and E.D. ITA 711/2011 & batch matters Page 25 of 39 Sassoon & Company Ltd. and Ors. v. CIT, Bombay City [1954] 26 ITR 27 (SC). 36. In support of his plea that, when there is a mercantile basis of maintenance of books of accounts, the same principles would have to apply for allowing the claim on accrual basis reliance was placed on CIT v. Woodward Governor India P. Ltd. [2009] 312 ITR 247 (SC); Keshav Mills Ltd. v. Commissioner of Income Tax, Bombay [1953] 23…

Pr. Commissioner of Income Tax-10 vs. Jagdish Prashad Gupta

ITA/424/2016HC Delhi18 Aug 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 260A

…. (2013) 358 ITR 295 (SC) and E.D. ITA 711/2011 & batch matters Page 25 of 39 Sassoon & Company Ltd. and Ors. v. CIT, Bombay City [1954] 26 ITR 27 (SC). 36. In support of his plea that, when there is a mercantile basis of maintenance of books of accounts, the same principles would have to apply for allowing the claim on accrual basis reliance was placed on CIT v. Woodward Governor India P. Ltd. [2009] 312 ITR 247 (SC); Keshav Mills Ltd. v. Commissioner of Income Tax, Bombay [1953] 23…

CIT vs. Jagdish Prasad Gupta

ITA/787/2011HC Delhi18 Aug 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 260A

…. (2013) 358 ITR 295 (SC) and E.D. ITA 711/2011 & batch matters Page 25 of 39 Sassoon & Company Ltd. and Ors. v. CIT, Bombay City [1954] 26 ITR 27 (SC). 36. In support of his plea that, when there is a mercantile basis of maintenance of books of accounts, the same principles would have to apply for allowing the claim on accrual basis reliance was placed on CIT v. Woodward Governor India P. Ltd. [2009] 312 ITR 247 (SC); Keshav Mills Ltd. v. Commissioner of Income Tax, Bombay [1953] 23…

CIT vs. Jagdish Prasad Gupta

ITA/1535/2010HC Delhi18 Aug 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 260A

…. (2013) 358 ITR 295 (SC) and E.D. ITA 711/2011 & batch matters Page 25 of 39 Sassoon & Company Ltd. and Ors. v. CIT, Bombay City [1954] 26 ITR 27 (SC). 36. In support of his plea that, when there is a mercantile basis of maintenance of books of accounts, the same principles would have to apply for allowing the claim on accrual basis reliance was placed on CIT v. Woodward Governor India P. Ltd. [2009] 312 ITR 247 (SC); Keshav Mills Ltd. v. Commissioner of Income Tax, Bombay [1953] 23…

CIT vs. Jagdish Prasad Gupta

ITA/711/2011HC Delhi18 Aug 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 260A

…. (2013) 358 ITR 295 (SC) and E.D. ITA 711/2011 & batch matters Page 25 of 39 Sassoon & Company Ltd. and Ors. v. CIT, Bombay City [1954] 26 ITR 27 (SC). 36. In support of his plea that, when there is a mercantile basis of maintenance of books of accounts, the same principles would have to apply for allowing the claim on accrual basis reliance was placed on CIT v. Woodward Governor India P. Ltd. [2009] 312 ITR 247 (SC); Keshav Mills Ltd. v. Commissioner of Income Tax, Bombay [1953] 23…

Jagdish Prasad Gupta

ITA/695/2010HC Delhi18 Aug 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 260A

…. (2013) 358 ITR 295 (SC) and E.D. ITA 711/2011 & batch matters Page 25 of 39 Sassoon & Company Ltd. and Ors. v. CIT, Bombay City [1954] 26 ITR 27 (SC). 36. In support of his plea that, when there is a mercantile basis of maintenance of books of accounts, the same principles would have to apply for allowing the claim on accrual basis reliance was placed on CIT v. Woodward Governor India P. Ltd. [2009] 312 ITR 247 (SC); Keshav Mills Ltd. v. Commissioner of Income Tax, Bombay [1953] 23…

Shorewala Overseas, Delhi vs. ITO, New Delhi

In the result, the appeal of the assessee is partly allowed and the Stay Application is dismissed

ITA 5634/DEL/2016[2012-13]Status: DisposedITAT Delhi12 Jun 2017AY 2012-13

Bench: Sh. N. K. Saini

For Appellant: Sh. Repudaman Thakur, FCAFor Respondent: Sh. Bedobani Chaudhari, Sr. DR
Section 143(1)Section 271(1)(c)Section 40Section 5

…any hypothetical income and if the income does not result at all, there cannot be a tax, even though in book keeping and entries are made about a hypothetical income. The reliance was placed on the following case laws: " E. D. Sassoon & Co. Ltd. Vs CIT (1954) 26 ITR 27 " DIT Vs Ericsson Communications Ltd. (2015) 378 ITR 395 (Del.) " CIT Vs Shoorji Vallabhdas and Co. (1962) 46 ITR 144 (SC) " CIT Vs Chamanlal Mangaldas and Co. (1960) 39 ITR 8 (Sc) 11. In his rival submissions the ld. DR strongly supported the orders of the authorities below and reiterated the observations made in their respective orders. 7 S.A. No…

DCIT, New Delhi vs. M/S. Sistema Shyam Teleservices Ltd., New Delhi

Appeal of the Revenue is dismissed

ITA 3926/DEL/2014[2009-10]Status: DisposedITAT Delhi23 May 2017AY 2009-10

Bench: Shri R. K. Panda & Ms Suchitra Kamble

…1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘G’ NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A .No.3926/DEL/2014 (ASSESSMENT YEAR 2009-10) DCIT Vs Sistema Shyam Teleservices Circle-8(1) Ltd. New Delhi A-60, Naraina Indl. Area-1 New Delhi AACCS1709H (APPELLANT) (RESPONDENT) Appellant by Sh. N.K. Bansal, Sr. DR Respondent by Sh. Alok Vasant, Adv Date of Hearing 16.05.2017 Date of Pronouncement 23.05.2017 ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the Revenue against the order dated 24/4/2014 passed by CIT(A)-XI, New Delhi. 2. The gr…

Anuj Kumar, Jaipur vs. ITO, Jaipur

In the result, the appeal of the assessee is allowed

ITA 62/JPR/2017[2009-10]Status: DisposedITAT Jaipur21 Apr 2017AY 2009-10
For Appellant: Shri P.C. Parwal CAFor Respondent: Smt. Poonam Rai, DCIT-. DR
Section 68

…Singh is the brother-in-law of the assessee. It is a settled law that only real income can be taxed, hypothetical income cannot be taxed nor income cannot be taxed in vacuum as held by the Hon’ble Supreme Court in case E.D. Sasoon & Co. & Ors. vs. CIT (1954) 26 ITR 27 and Godhra Electricity Co. Ltd. vs. CIT (1997) 225 ITR 746. ‘’ 2.3 On the other hand, the ld. DR relied on the order of the ld. CIT(A). 2.4 I have heard the rival contentions and perused the materials available on record. it is noted that that the ld. CIT(A) has accepted the source of deposit of Rs. 25 lacs made in the bank account of the assess…

Bajargan Traders, Jaipur vs. ACIT, Alwar

In the result, the ground no

ITA 137/JPR/2017[2013-14]Status: DisposedITAT Jaipur17 Mar 2017AY 2013-14
For Appellant: Shri P.C. Parwal (C. A)For Respondent: Shri Prem Prakash Meena (JCIT)
Section 133

…at the outset, it may be noted that the AO has made addition on account of notional interest of Rs. 1,39,366/-. There cannot be any addition on account of notional income as held by the Hon’ble Supreme Court in case of E.D.Sassoon & Co. & Ors. Vs. CIT (1954) 26 ITR 27 and Godhra Electricity Co. Ltd. vs. CIT (1997) 225 ITR 746 where it was held that only real income can be taxed, hypothetical income cannot be taxed nor income can be taxed in vacuum. Therefore, the addition made by the AO is not as per law and the same be deleted. The ld. CIT(A) has confirmed the addition by stating that it is the disallowance of…

ITO 19(3)(2), Mumbai vs. Indian Corporate Loan Securitization Trust 2008 Series 14I, Mumbai

In the result, Revenue’s appeal for A

ITA 4343/MUM/2013[2009-10]Status: DisposedITAT Mumbai17 Feb 2017AY 2009-10

Bench: Shri Jason P. Boaz & Shri Sandeep Goasinindian Corporate Loan Securitisation Income Tax Officer-9(3)(2) Trust- 2008 Series 14 Mumbai C/O. Il & Fs Trust Co. Ltd. Vs. 10Th Floor, “G” Block, Bkc Bandra (E), Mumbai 400051 Pan – Aaati6786P Appellant Respondent Income Tax Officer-(23)1)(2) Indian Corporate Loan [Erstwhile Ito-19(3)(2)] Securitisation Trust- 2008 Series 14 Room No. 108, Matru Mandir Vs. C/O. Il & Fs Trust Co. Ltd. Tardeo Road, Grant Road 10Th Floor, “G” Block, Bkc Mumbai 400007 Bandra (E), Mumbai 400051 Pan – Aaati6786P Appellant Respondent

For Appellant: Shri S.E. Dastur &For Respondent: Shri P.C. Chhotaray

…reliance was placed in the case of DIT (International Taxation) vs. Credit Suisse First Boston (Cyprus) Ltd. 351 ITR 323 (Bom), wherein the Hon'ble Bombay High Court, relying on the decision of the Hon'ble Supreme Court, in the case of E.D. Sasson & Co. Ltd. 26 ITR 27, 52 (SC), held that when an instrument or an agreement stipulates interest to be payable on a specified date, interest does not accrue to the assessee on any date prior thereto. In view of the above, it is the contention of the assessee that the income accrued only when there was a right to receive the income, as mentioned in the Deed of Assignment…

DCIT, Coimbatore vs. M/S. Drs Industries Ltd., Coimbatore

In the result, the appeal of the Revenue as well as the cross- objection of the assessee are dismissed

ITA 2727/CHNY/2016[2011-12]Status: DisposedITAT Chennai03 Feb 2017AY 2011-12

Bench: Shri N.R.S. Ganesan & Shri Abraham P. Georgeआयकर अपील सं./Ita No.2727/Mds/2016 & C.O. No.176/Mds/2016 (In I.T.A. No.2727/Mds/2016) "नधा"रण वष" / Assessment Year : 2011-12

For Appellant: Shri Shiva Srinivas, JCITFor Respondent: Shri G. Ramaswamy, CA
Section 115JSection 2Section 50B(1)Section 50B(3)

…see also stated that there was individual valuation of assets and since individual values were assigned, Section 2(42C) could not be applied. Reliance was also placed on the judgment of Hon'ble Apex Court in the case of E.D. Sassoon & Co. Ltd. v. CIT (1954) 26 ITR 27. However, the A.O. did not accept these contentions. According to him, the sum of `3,00,00,000/- received by the assessee was on account of a slump sale and could only be considered as short-term capital gains. An addition was accordingly made. 6. In its appeal before the CIT(Appeals), argument of the assessee once again was that the agreement h…

Hero Motocorp Limited, New Delhi vs. JCIT, New Delhi

In the result appeal of the assessee in ITA No

ITA 1545/DEL/2015[2010-11]Status: DisposedITAT Delhi24 Oct 2016AY 2010-11

Bench: Sh. I. C. Sudhir & Shri Prashant Maharishihero Motocorp Limited, Jcit, 34, Basant Lok, Vasant Range-1, New Delhi Vs. Vihar, New Delhi Pan: Aaach0812J (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community Vs. New Delhi Centre, Basant Lok, Vasant Vihar, New Delhi-110057 (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. NC Sawain, CIT DR
Section 143Section 143(3)Section 144CSection 92C

…Vs. JCIT & DCIT Vs. Hero MotoCorp Ltd. ITA Nos. 1545/Del/2015 and 2424/Del/2015 (AY 2010-11) ITA No. 1609/Del/2016 and 914/Del/2016 (AY 2011-12) Page 100 of 484 payer or there must be a debt owed to the recipient by the payer. [Refer: E.D. Sasoon & Co. Ltd: 26 ITR 27 (SC)]. (iii) Therefore, unless the recipient is vested with a right to receive payment from the payer, no income can be said to have accrued in the hands of such payee. b. ACIT v. Motor Industries Co.: 249 ITR 141 (Kar.) c. Ericsson Communication Ltd.: TS-523-HC-DEL h) Without prejudice, considering that similar payments were made by the applican…

Bangalore Metro Rail Corporation Ltd., Bangalore vs. DCIT, Bangalore

In the result, four appeals of the assessee for AY: 2006-07 & 2008-

ITA 868/BANG/2015[2006-07]Status: DisposedITAT Bangalore05 Aug 2016AY 2006-07

Bench: Shri Sunil Kumar Yadav & Shri A.K.Garodia, Accounant Member

For Appellant: Shri Shreehari Kutsa, CAFor Respondent: Smt. P. Renugadevi, JCIT
Section 201Section 201(1)

…) is incorrect because no income has accrued in the hands of the deductee, so 3 ITA Nos.868 to 874(Bang)2015 no TDS should be deducted. He also submitted that reliance is being placed on the following judicial pronouncements; i) E.D Sason & Co., Ltd Vs CIT 26 ITR 27(SC) ii)Shoorji Vallabhdas & Co Vs CIT 46 ITR 144(SC) iii) CIT Vs Birla Gwalior Pvt.Ltd 89 ITR 266(SC) iv) CIT Vs WExcel Industries Ltd., 358 ITR 295(SC) v) State Bank of Travancore Vs CIT 158 ITR 102(SC) vi) Morvi Industries Ltd., Vs CIT 82 ITR 835 (SC) vii) Godhara Electricity Co.Ltd.,CIT 225 ITR 746 (SC) viii) M/s P.G & W.Sawoo Pv.Ltd., Vs ACIT i…

Commissioner of Income Tax-IX vs. Raman Khera

The appeals are disposed of in the above terms but in the facts and

ITA/476/2014HC Delhi03 Aug 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE NAJMI WAZIRI

Section 260A

…A) the three Assessees went in appeal before the ITAT which by the impugned order allowed the appeals after coming to the following conclusion: (i) When examined in the light of the decision in E.D. Sasoon & Co. Ltd. v. Commissioner of Income Tax (1954) 26 ITR 27(SC), it is seen that the Assessees had not served the entire period of five years and had, therefore, not awarded emoluments in the sums paid to each of them. In other words, the entire income could not be said to have accrued to the Assessee as the Assessee had not created a debt or a right to receive the payment. (ii) Accounting Standard…

Commissioner of Income Tax-IX vs. Raman Khera

The appeals are disposed of in the above terms but in the facts and

ITA/326/2015HC Delhi03 Aug 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE NAJMI WAZIRI

Section 260A

…A) the three Assessees went in appeal before the ITAT which by the impugned order allowed the appeals after coming to the following conclusion: (i) When examined in the light of the decision in E.D. Sasoon & Co. Ltd. v. Commissioner of Income Tax (1954) 26 ITR 27(SC), it is seen that the Assessees had not served the entire period of five years and had, therefore, not awarded emoluments in the sums paid to each of them. In other words, the entire income could not be said to have accrued to the Assessee as the Assessee had not created a debt or a right to receive the payment. (ii) Accounting Standard…