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

Natvar Parikh & Company Pvt.Ltd., Mumbai vs. The Dy.C.I.T., Central Circle 40, Mumbai

In the result, appeals of the assessee are allowed in part, whereas appeal of revenue is dismissed

ITA 2146/MUM/2009[2006-2007]Status: DisposedITAT Mumbai20 Nov 2015AY 2006-2007

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm आमकय अऩीर सं./Ita No.2146&2147/Mum/2009 & Ita No.2283/Mum/2011 (नििाारण वषा / Assessment Year :2006-07 To 2008-09) M/S Natvar Parikh & Co. Pvt. Vs. Dcit, Cc-40, Mumbai-20 Ltd., 96, Chembur Mankhurd Link Road, Shivaji Nagar, Mumbai- 400043 स्थामी रेखा सं./ जीआइआय सं./ Pan/Gir No. : Aaacn 2937 Q (अऩीराथी /Appellant) (प्रत्मथी / Respondent) .. & आमकय अऩीर सं./Ita No.2986/Mum/2009 (नििाारण वषा / Assessment Year :2007-08) Acit, Cc-40, Mumbai-20 Vs. M/S Natvar Parikh & Co. Pvt. Ltd., 96, Chembur Mankhurd Link Road, Shivaji Nagar, Mumbai-400043 स्थामी रेखा सं./ जीआइआय सं./ Pan/Gir No. : Aaacn 2937 Q (अऩीराथी /Appellant) (प्रत्मथी / Respondent) .. ननधाारयती की ओर से /Assessee By : Shri Madhur Agarwal याजस्व की ओर से /Revenue By : Shri N.P.Singh सुनवाई की तायीख / Date Of Hearing : 16/08/2015 घोषणा की तायीख/Date Of Pronouncement 20/11/2015 आदेश / O R D E R Per R.C.Sharma (A.M): These Are The Appeals Filed By The Assessee & Revenue Against The Order Of Cit(A), Mumbai, For The Assessment Years 2006-07 To 2008- 09. 2. In Asessee’S Appeal (I.E.

For Appellant: Shri Madhur AgarwalFor Respondent: Shri N.P.Singh
Section 132Section 132(4)

…where onetime membership is received for a specified period of time, the issue has been dealt by the ITAT Special Bench in the case of Club Mahindra Holidays, 40 DTR 1, wherein after considering the decision of Hon’ble Supreme Court in the case of E.D.Sasoon, 26 ITR 27, Madras Industrial Corporation Ltd., 225 ITR 802, Calcutta Co. Ltd. 37 ITR 1 and in the case of Rotork Controls India Pvt. Ltd., 314 ITR 62, it was held that membership fee received for 33/25 years was liable to spread over the period of time for which such fee is received. Respectfully following the same, we direct the AO to tax 1/25th share of fe…

Le Passage to India Tours & Travels Pvt. Ltd., New Delhi vs. ACIT, New Delhi

In the result, ITA No.1528/Del/2015 is partly allowed for statistical purposes

ITA 1529/DEL/2015[2010-11]Status: DisposedITAT Delhi29 Sept 2015AY 2010-11

Bench: Shri N.K. Billaiya & Shri Suchitra Kamble[Assessment Year: 2009-10]

Section 143(3)

…ses, advertising agencies, marketing bodies etc.) and cannot be treated as related party transactions merely because some incidental benefit is said to accrue to the assessee. In this context, the Court cited the Supreme Court decision of E.D. Sasson (1954) 26 ITR 27 where it was held that an expenditure cannot long as it was incurred wholly and exclusively for business purpose. 26. This means that income/expenditure must arise qua an international transaction meaning thereby that the income has accrued to the Indian Tax Payer under International Transactions entered into with an associated enterprises or exp…

Le Passage to India Tours & Travels Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, ITA No.1528/Del/2015 is partly allowed for statistical purposes

ITA 2491/DEL/2014[2009-10]Status: DisposedITAT Delhi29 Sept 2015AY 2009-10

Bench: Shri N.K. Billaiya & Shri Suchitra Kamble[Assessment Year: 2009-10]

Section 143(3)

…ses, advertising agencies, marketing bodies etc.) and cannot be treated as related party transactions merely because some incidental benefit is said to accrue to the assessee. In this context, the Court cited the Supreme Court decision of E.D. Sasson (1954) 26 ITR 27 where it was held that an expenditure cannot long as it was incurred wholly and exclusively for business purpose. 26. This means that income/expenditure must arise qua an international transaction meaning thereby that the income has accrued to the Indian Tax Payer under International Transactions entered into with an associated enterprises or exp…

New Holland Tractors (India) Private Limited

ITA/182/2002HC Delhi25 Sept 2014
Section 271(1)(c)

…erring to the authoritative pronouncement of this Court in Commissioner of Income Tax versus Dinesh Kumar Goel, (2011) 331 ITR 10, wherein earlier judgments of the Supreme Court in E.D. Sassoon and Company Limited versus Commissioner of Income Tax, (1954) 26 ITR 27 and Calcutta Company Limited versus Commissioner of Income Tax, West Bengal (1959) 37 ITR 1 were elucidated and explained. In Dinesh Kumar Goel (supra), the respondent- assessee, a coaching institute, following mercantile system of accounting had received the total fee for the entire course on enrolment or at the time 2014:DHC:5004-DB ITA N…

The Commissioner of Income Tax-VI vs. M/S. Uberoi Sons (Machines) Ltd

ITA-166/2006HC Delhi31 Aug 2012
Section 147Section 147(1)

…of section 22 of the Act. A similar view has been expressed by the Calcutta High Court in Hamilton & Co. (P) Ltd.’s case (supra), with which we are in respectful agreement.” 12. In one of its earlier judgments, E. D. Sassoon and Co. Ltd. v. CIT [1954] 26 ITR 27 (SC), the Supreme Court examined the meaning of the expressions, 'arises' 'accrue', and 'is received' while considering what is “income”. The Court’s observations, extracted below, are illuminating: 'Now what is income ? The term is nowhere defined in the Act. . . In the absence of a statutory definition we must take its ordinary dictionary…

Commissioner of Income Tax vs. M/S Uberoi Sons Machines Ltd

ITA - 166 / 2006HC Delhi31 Aug 2012
Section 147Section 147(1)

…of section 22 of the Act. A similar view has been expressed by the Calcutta High Court in Hamilton & Co. (P) Ltd.’s case (supra), with which we are in respectful agreement.” 12. In one of its earlier judgments, E. D. Sassoon and Co. Ltd. v. CIT [1954] 26 ITR 27 (SC), the Supreme Court examined the meaning of the expressions, 'arises' 'accrue', and 'is received' while considering what is “income”. The Court’s observations, extracted below, are illuminating: 'Now what is income ? The term is nowhere defined in the Act. . . In the absence of a statutory definition we must take its ordinary dictionary…

The Commissioner of Income Tax -VI vs. M/S. Uberoi Sons (Machines) Ltd

ITA/166/2006HC Delhi31 Aug 2012
Section 147Section 147(1)

…of section 22 of the Act. A similar view has been expressed by the Calcutta High Court in Hamilton & Co. (P) Ltd.’s case (supra), with which we are in respectful agreement.” 12. In one of its earlier judgments, E. D. Sassoon and Co. Ltd. v. CIT [1954] 26 ITR 27 (SC), the Supreme Court examined the meaning of the expressions, 'arises' 'accrue', and 'is received' while considering what is “income”. The Court’s observations, extracted below, are illuminating: 'Now what is income ? The term is nowhere defined in the Act. . . In the absence of a statutory definition we must take its ordinary dictionary…

M/S Topman Exports vs. Commr of Income Tax, Mumbai

C.A. No.-001699-001699 - 2012Supreme Court08 Feb 2012

…r a transaction; sometimes used synonymously with net income for the period. Gain realized from business or investment over and above expenditures.” This Court in E.D. Sassoon & Company Ltd. and Others v. Commissioner of Income-Tax, Bombay City (1954) 26 ITR 27 (SC) has quoted the following observations of Lord Justice Fletcher Moulton in The Spanish Prospecting Company Limited [(1911) I Ch. 92] on the meaning of the word “profits”: 30 Page 31 JUDGMENT “…. ‘Profits’ implies a comparison between the state of a business at two specific dates usually separated by an interval of a year. The fund…

Commissioner of Income Tax vs. Gautam R. Chadha

Appeals stand disposed of

ITA - 310 / 2009HC Delhi27 Jul 2011

…ITA Nos.310/2009, 358/2011 & 1115/2010 Page 1 of 14 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA No.310/2009 % Date of Reserve: May 12, 2011 Date of Decision: July 27, 2011 COMMISSIONER OF INCOME TAX … Appellant Through: Ms. Prem Lata Bansal, Sr. Advocate with Mr. Deepak Anand, Advocates Versus GAUTAM R. CHADHA … RESPONDENT Through: Mr. A.N. Hakser, Sr. Advocate with Mr. Udyan Jain and Mr. Ashok Sikka, Advocates AND…

Commissioner of Income Tax V vs. R.J.Wood P.Ltd

ITA/261/2007HC Delhi25 Jan 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 148Section 23

…meant ‗before being entitled to receive‘. (3) Under section 5 of the Income-tax Act, 1918 (c. 40) : see IRC v. Pakenham, 96 LJKB 882 (CA), affirmed (1928) AC 252 (HL); Leigh v. IRC, 43 TLR 528.‖ The apex court in E.D. Sassoon and Co. Ltd. v. CIT [1954] 26 ITR 27, had the occasion to consider the meaning of the words, ―accrue‖, ―arises‖, and ―is received‖ in the context of the definition of income. The apex court held (page 50) : ―Now what is income? The term is nowhere defined in the Act … In the absence of a statutory definition we must take its ordinary dictionary meaning – ‗that which comes in a…

Commissioner of Income Tax V vs. R.J.Wood P.Ltd. Delhi

ITA/363/2007HC Delhi25 Jan 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 148Section 23

…before recei ng' his share ; held, that that phrase meant 'before bei entitled to receive' Under seOti of the Income-tax Act, 1918 (3) (c. 40) : affirmed 528;', see ,IRC v. P , 96 LJKB 882 (CA), (i928) AC 2s2 (HL); Leigh v. IRC, 43 TLR The apex court in U9541 26 ITR 27, had meaning of the words D. Sassoon and Co. Ltd. v. CIT the occasion to consider the "accrue", "arises", and "is received" in the context the definition of income. The apex court held (page 50) "Now what is income?lThe term is nowhere defined in the Act ... In the of a statutory definition we must take its dictionary meaning - 'that *iti"h comes i…

Commissioner of Income Tax V vs. R.J.Wood P.Ltd

ITA/335/2007HC Delhi25 Jan 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 148Section 23

…before recei ng' his share ; held, that that phrase meant 'before bei entitled to receive' Under seOti of the Income-tax Act, 1918 (3) (c. 40) : affirmed 528;', see ,IRC v. P , 96 LJKB 882 (CA), (i928) AC 2s2 (HL); Leigh v. IRC, 43 TLR The apex court in U9541 26 ITR 27, had meaning of the words D. Sassoon and Co. Ltd. v. CIT the occasion to consider the "accrue", "arises", and "is received" in the context the definition of income. The apex court held (page 50) "Now what is income?lThe term is nowhere defined in the Act ... In the of a statutory definition we must take its dictionary meaning - 'that *iti"h comes i…

The Commissioner of Income Tax vs. M/S Oswal Agro Mills Ltd

The appeal is dismissed

ITA/158/2006HC Delhi27 Oct 2010

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE SURESH KUMAR KAIT

…comes due when the NCDs are required to be redeemed as per the specified terms and conditions and not prior to that. For this proposition, we find support from the judgment of apex court in the case of E.D. Sasoon & Company Ltd. & Others Vs. CIT (1954) 26 ITR 27 (SC).” 6. The Tribunal also relied upon the judgment of the Calcutta High Court in CIT v. Tungabharda Industries Ltd., 207 ITR 553 (Cal). In that case the Court has categorically held that the expenditure incurred in respect of debentures was revenue expenditure and the liability to pay premium arose at the expiry of the 7th year from the…

Commissioner of Income Tax vs. Woodward Governor India Pvt. Ltd

The appeal is dismissed

ITA-49/2005HC Delhi30 Apr 2007

…to survive in the present. The liability 'accrues' the minute the contract is entered into and continues till it is fully discharged. This liability is neither contingent nor notional. Reliance is placed on decisions in E.D.Sasoon & Company Ltd. -vs- CIT, 26 ITR 27 (SC), Calcutta Company Ltd. -vs- CIT, 37 ITR 1 (SC), Bharat Earth Movers Ltd. – vs- CIT, 245 ITR 428(SC), CIT -vs- BHEL, 239 ITR 756, CIT -vs- Bank of India, 218 ITR 371 and CIT -vs- IBM, 161 ITR 673 (Bombay). (f) As far as the capital account cases are concerned, the Statement of Object and Reasons appended to the Bill preceding the introd…

Commissioner of Income Tax vs. India Pvt. Ltd

The appeal is dismissed

ITA/49/2005HC Delhi30 Apr 2007

…to survive in the present. The liability 'accrues' the minute the contract is entered into and continues till it is fully discharged. This liability is neither contingent nor notional. Reliance is placed on decisions in E.D.Sasoon & Company Ltd. -vs- CIT, 26 ITR 27 (SC), Calcutta Company Ltd. -vs- CIT, 37 ITR 1 (SC), Bharat Earth Movers Ltd. – vs- CIT, 245 ITR 428(SC), CIT -vs- BHEL, 239 ITR 756, CIT -vs- Bank of India, 218 ITR 371 and CIT -vs- IBM, 161 ITR 673 (Bombay). (f) As far as the capital account cases are concerned, the Statement of Object and Reasons appended to the Bill preceding the introd…

Shrimand Padmaraja R. Kadambanda, Dhulia vs. The Commnr. of Income Tax, Pune

C.A. No.-002201-002203 - 1979Supreme Court22 Apr 1992
For Respondent: COMMISSIONER OF INCOME TAX, PUNE
Section 15Section 15(1)Section 15(1)(d)Section 2(24)Section 4

…http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 14 PETITIONER: SHRIMANT PADMARAJE R. KADAMBANDE Vs. RESPONDENT: COMMISSIONER OF INCOME TAX, PUNE DATE OF JUDGMENT22/04/1992 BENCH: MOHAN, S. (J) BENCH: MOHAN, S. (J) RAY, G.N. (J) CITATION: 1992 AIR 1495 1992 SCR (2) 705 1992 SCC (3) 432 JT 1992 (3) 1 1992 SCALE (1)890 ACT: INCOME TAX ACT, 1961: Section 2(24)-Assessee in receipt of compassionate payment in lieu of cash allowance abolished-Payment purely compassionate, discretionary and voluntary, at the request of the assessee-Assessee havin…