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 367,154 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

M/S Kulkarni & Sahu Buildcon Pvt.Ltd., Bhilai(Cg) vs. The Dy. Commissioner of Income Tax 1(1), Bhilai(Cg)

In the result, appeal of the assessee is allowed in terms our aforesaid observations

ITA 30/BIL/2016[2012-13]Status: DisposedITAT Raipur12 Dec 2022AY 2012-13

Bench: Shri Ravish Sood & Shri G D Padmahshaliआयकर अपील सं. / Ita No.30/Rpr/2016 "नधा"रण वष" / Assessment Year :2012-13 M/S. Kulkarni & Sahu Buildcon Pvt. Ltd. B-495, Cross Street-25, Smriti Nagar, Bhilai-490020 (C.G.) Pan :Aaeck3160C .......अपीलाथ" / Appellant बनाम / V/S. The Deputy Commissioner Of Income Tax-1(1), Bhilai (C.G.) ……""यथ" / Respondent

For Appellant: Shri Nilesh Jain, CAFor Respondent: Shri Choudhary N.C Roy, Sr. DR
Section 133ASection 143(2)Section 143(3)Section 69

…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 19 M/s. Kulkarni & Sahu Buildcon Pvt. Ltd. Vs. Deputy Commissioner of Income Tax-1(1) is not as per law and the same be delet…

Deputy Commissioner of Income Tax, Central Circle-2(4), Bangalore vs. Century Real Estate Holdings Private Limited, Bangalore

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

ITA 740/BANG/2022[2013-14]Status: DisposedITAT Bangalore30 Nov 2022AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2013-14

For Appellant: Smt. Sheetal Borkar, A.RFor Respondent: Shri Gudimella V.P. Pavan Kumar, D.R

…ered for taxation in the assessment year under consideration and the ld. A.R. relied on the Accounting Standard-9 issued by ICAI, New Delhi. This proposition was supported by decision of Hon’ble Supreme Court in the case of E.D. Sasoon & Company Ltd. Vs. CIT (26 ITR 27). In this case at pages 51-52, the Hon’ble Supreme Court has observed as under:- “If income has accrued to the assessee it is certainly earned by him in the sense that he has contributed to its production or the parenthood of the income can be traced to him. But in order that the income can be said to have accrued to or earned by the assessee it…

Century Real Estate Holdings Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

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

ITA 580/BANG/2022[2013-14]Status: DisposedITAT Bangalore30 Nov 2022AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2013-14

For Appellant: Smt. Sheetal Borkar, A.RFor Respondent: Shri Gudimella V.P. Pavan Kumar, D.R

…ered for taxation in the assessment year under consideration and the ld. A.R. relied on the Accounting Standard-9 issued by ICAI, New Delhi. This proposition was supported by decision of Hon’ble Supreme Court in the case of E.D. Sasoon & Company Ltd. Vs. CIT (26 ITR 27). In this case at pages 51-52, the Hon’ble Supreme Court has observed as under:- “If income has accrued to the assessee it is certainly earned by him in the sense that he has contributed to its production or the parenthood of the income can be traced to him. But in order that the income can be said to have accrued to or earned by the assessee it…

Bbc World Distribution Ltd., Gurgaon vs. ADIT, New Delhi

In the result, all the appeals are allowed, as indicated above

ITA 610/DEL/2011[2007-08]Status: DisposedITAT Delhi21 Nov 2022AY 2007-08

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2006-07 & Assessment Year: 2007-08 & Assessment Year: 2008-09

…d, taxing of notional income at the hands of the 7 | P a g e ITA Nos.1907/Del/2011; 610/Del/2011 & 5415/Del/2011 assessee is unjustified. In support of his contention, learned counsel relied upon the following decisions: • E.D. Sassoon & Co. Vs. CIT [1954] 26 ITR 27 (SC) • CIT Vs. Shoorji Vallabhdas & Co. [1962] 46 ITR 144 (SC) • Godhra Electricity Company Vs. CIT [1997] 225 ITR 746 (SC) • CIT Vs. Excel Industries Ltd. [2013] 358 ITR 295 (SC) • Shivnandan Buildcon Pvt. Ltd. Vs. CIT [2015] 60 taxmann.com 347 8. Insofar as the allegation of the departmental authorities that the assessee has a PE in India in th…

Bbc World Distribution Ltd., Gurgaon vs. ADIT, New Delhi

In the result, all the appeals are allowed, as indicated above

ITA 5415/DEL/2011[2008-09]Status: DisposedITAT Delhi21 Nov 2022AY 2008-09

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2006-07 & Assessment Year: 2007-08 & Assessment Year: 2008-09

…d, taxing of notional income at the hands of the 7 | P a g e ITA Nos.1907/Del/2011; 610/Del/2011 & 5415/Del/2011 assessee is unjustified. In support of his contention, learned counsel relied upon the following decisions: • E.D. Sassoon & Co. Vs. CIT [1954] 26 ITR 27 (SC) • CIT Vs. Shoorji Vallabhdas & Co. [1962] 46 ITR 144 (SC) • Godhra Electricity Company Vs. CIT [1997] 225 ITR 746 (SC) • CIT Vs. Excel Industries Ltd. [2013] 358 ITR 295 (SC) • Shivnandan Buildcon Pvt. Ltd. Vs. CIT [2015] 60 taxmann.com 347 8. Insofar as the allegation of the departmental authorities that the assessee has a PE in India in th…

Bbc World Distribution Ltd., Gurgaon vs. ADIT, New Delhi

In the result, all the appeals are allowed, as indicated above

ITA 1907/DEL/2011[2006-07]Status: DisposedITAT Delhi21 Nov 2022AY 2006-07

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2006-07 & Assessment Year: 2007-08 & Assessment Year: 2008-09

…d, taxing of notional income at the hands of the 7 | P a g e ITA Nos.1907/Del/2011; 610/Del/2011 & 5415/Del/2011 assessee is unjustified. In support of his contention, learned counsel relied upon the following decisions: • E.D. Sassoon & Co. Vs. CIT [1954] 26 ITR 27 (SC) • CIT Vs. Shoorji Vallabhdas & Co. [1962] 46 ITR 144 (SC) • Godhra Electricity Company Vs. CIT [1997] 225 ITR 746 (SC) • CIT Vs. Excel Industries Ltd. [2013] 358 ITR 295 (SC) • Shivnandan Buildcon Pvt. Ltd. Vs. CIT [2015] 60 taxmann.com 347 8. Insofar as the allegation of the departmental authorities that the assessee has a PE in India in th…

The Commissioner of Income Tax-III vs. M/S Sri Krishna Drugs Ltd

ITTA/166/2006HC Telangana16 Nov 2022

Bench: C.V. BHASKAR REDDY,UJJAL BHUYAN

Assistant Commissioner of Income Tax, Central Circel-2(1), Bangalore vs. Sri Mathikere Ramaiah Seetharam, Bangalore

In the result, the appeals filed by the revenue are dismissed and the COs filed by the assessee are partly allowed for statistical purposes

ITA 544/BANG/2021[2016-17]Status: DisposedITAT Bangalore07 Nov 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri H. Nagin Khincha &For Respondent: Shri M. Mathivanan, D.R
Section 131Section 132(4)Section 153CSection 45(2)

…y be received later, on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody. There must be, as is otherwise expressed, debitum in praesenti, solvendum in futuro (26 ITR 27). In other words, unless and until a debt is created in favour of the assessee by somebody, it cannot be said that he has acquired a right to receive the income or that income, as accrued to him. It is no doubt that accrual of income does not depend upon its ascertainment or the accounts cast by assessee. The accounts may be made by it at a much la…

Assistant Commissioner of Income Tax, Central Circel-2(1), Bangalore vs. Sri Mathikere Ramaiah Seetharam, Bangalore

In the result, the appeals filed by the revenue are dismissed and the COs filed by the assessee are partly allowed for statistical purposes

ITA 543/BANG/2021[2015-16]Status: DisposedITAT Bangalore07 Nov 2022AY 2015-16

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri H. Nagin Khincha &For Respondent: Shri M. Mathivanan, D.R
Section 131Section 132(4)Section 153CSection 45(2)

…y be received later, on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody. There must be, as is otherwise expressed, debitum in praesenti, solvendum in futuro (26 ITR 27). In other words, unless and until a debt is created in favour of the assessee by somebody, it cannot be said that he has acquired a right to receive the income or that income, as accrued to him. It is no doubt that accrual of income does not depend upon its ascertainment or the accounts cast by assessee. The accounts may be made by it at a much la…

Assistant Commissioner of Income Tax, Central Circel-2(1), Bangalore vs. Sri Mathikere Ramaiah Seetharam, Bangalore

In the result, the appeals filed by the revenue are dismissed and the COs filed by the assessee are partly allowed for statistical purposes

ITA 542/BANG/2021[2014-15]Status: DisposedITAT Bangalore07 Nov 2022AY 2014-15

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri H. Nagin Khincha &For Respondent: Shri M. Mathivanan, D.R
Section 131Section 132(4)Section 153CSection 45(2)

…y be received later, on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody. There must be, as is otherwise expressed, debitum in praesenti, solvendum in futuro (26 ITR 27). In other words, unless and until a debt is created in favour of the assessee by somebody, it cannot be said that he has acquired a right to receive the income or that income, as accrued to him. It is no doubt that accrual of income does not depend upon its ascertainment or the accounts cast by assessee. The accounts may be made by it at a much la…

Bsr Infratech India Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(1), Bangalore

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

ITA 697/BANG/2022[2017-18]Status: DisposedITAT Bangalore27 Oct 2022AY 2017-18

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2017-18

For Appellant: Shri Madhusudhan, A.RFor Respondent: Shri Praveen Karanth, D.R
Section 199Section 234ASection 270ASection 43Section 43C

…executed the contract. Unless and until there is a creation of right in favour of the assessee, debt due by somebody it cannot be said that he had acquired a right to receive the income or that income, has accrued to him (E.D. Sasoon & Co. Ltd. Vs. CIT (1954) 26 ITR 27 SC). It is no doubt that the accrual of income does not depend upon the accounts maintained by him. The accounts may be made up at a much later date. That depends upon the convenience of the assessee and also upon the exigency of the situation. The amount of the income, profits or gains may itself be ascertained later on the accounts being made up.…

JCIT (OSD) Circle-8(3)(1), Mumbai vs. M/S. Tridoss Laboratories Private Ltd., Mumbai

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

ITA 1489/MUM/2018[2002-03]Status: DisposedITAT Mumbai20 Oct 2022AY 2002-03
Section 143(3)Section 36(1)(iii)Section 37

…those parties. Accordingly, there cannot be any proportionate interest disallowance u/s.36(1)(iii) on notional basis. Reliance in this regard was placed on the decisions of the Hon’ble Supreme Court in the case of E.D. Sassoon & Co. Ltd., vs. CIT reported in 26 ITR 27; CIT vs. Shoorji Vallabhdas& Co., reported in 46 ITR 144; Godhra Electricity Co. Ltd., vs. CIT reported in 225 ITR 746; CIT vs. Bokaro Steel Ltd., reported in 236 ITR 315; CIT vs. Sarabhai Holdings Pvt. Ltd., reported in 307 ITR 89, among others. 3.5. The assessee also, on without prejudice basis, submitted that in any case out of the total intere…

M/S. Tridoss Laboratories Private Ltd., Mumbai vs. ACIT Cent. Cir. - 14, Mumbai

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

ITA 1462/MUM/2018[2002-03]Status: DisposedITAT Mumbai20 Oct 2022AY 2002-03
Section 143(3)Section 36(1)(iii)Section 37

…those parties. Accordingly, there cannot be any proportionate interest disallowance u/s.36(1)(iii) on notional basis. Reliance in this regard was placed on the decisions of the Hon’ble Supreme Court in the case of E.D. Sassoon & Co. Ltd., vs. CIT reported in 26 ITR 27; CIT vs. Shoorji Vallabhdas& Co., reported in 46 ITR 144; Godhra Electricity Co. Ltd., vs. CIT reported in 225 ITR 746; CIT vs. Bokaro Steel Ltd., reported in 236 ITR 315; CIT vs. Sarabhai Holdings Pvt. Ltd., reported in 307 ITR 89, among others. 3.5. The assessee also, on without prejudice basis, submitted that in any case out of the total intere…

Springer Nature Customer Services Centre Gmbh, New Delhi vs. JCIT, Internationalo Taxation, Circle-3(1)(2), New Delhi

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

ITA 2534/DEL/2019[2013-14]Status: DisposedITAT Delhi14 Oct 2022AY 2013-14

Bench: Shri Shamim Yahya & Shri Kul Bharat[Assessment Year : 2013-14] Springer Nature Customer Services Vs Jcit Centre Gmbh (Earlier Known As (International Taxation), Springer Customer Centre Gmbh), Circle-3(1)(2), 7Th Floor, Vijaya Building, New Delhi. 17-Barakhamba Road, New Delhi-110001. Pan-Aascs1092B Appellant Respondent Appellant By S/Shri Himanshu Sinha, Bhuwan Dhooper & Vibhu Gupta, Advocates Respondent By Ms. Rashmita Jha, Cit Dr Date Of Hearing 20.09.2022 Date Of Pronouncement 14.10.2022

Section 143(3)Section 234ASection 234BSection 271Section 9(1)(vi)

…nds of the Appellant. It is a well-established principle of law that what can be taxed is the ‘real income’ and not any notional/ hypothetical income. Reliance in this regard is placed on the following judicial precedents: • E. D. Sassoon & Co. vs CIT: [1954] 26 ITR 27 (SC) • CIT v. Ashokbhai Chimanbhai: [1965] 56 ITR 42 (SC) • CIT v. Hindustan Housing and Land Development Trust Ltd.: [1986] 161 ITR 524 (SC) • CIT v. Shoorji Vallabhdas & Co.: [1962] 46 ITR 144 (SC) • Godhra Electricity Company V CIT: [1997] 225 ITR 746 (SC) • CIT vs. Excel Industries Ltd.: (2013) 358 ITR 295 (SC) 12 | P a g e Ground No. 4: Inter…

The Commissioner of Income-Tax vs. M/S. Canara Bank

ITA/268/2018HC Karnataka13 Sept 2022

Bench: P.S.DINESH KUMAR,UMESH M ADIGA

Section 260Section 45(2)

…ance. Accordingly, we answer this question against the revenue and in favour of the assessee. 8. The next question is with regard to the protection of foreign exchange fluctuation pertaining 4 [1954] 26 ITR 27 SC 9 to forwards contracts. In substance, the Bank agrees to pay the money in Indian currency equal to the foreign exchange rate by entering into a contract in respect of the fluctuation of the foreign exchange value. In that scenario, the Bank may either gain some money or lose money dep…

The Assistant Commissioner of Income Tax, Circle- 1(1), Mysuru vs. M/S. Bhoruka Aluminium Limited, Mysuru

In the result, appeal of the Revenue is allowed

ITA 2551/BANG/2019[2014-15]Status: DisposedITAT Bangalore16 Aug 2022AY 2014-15

Bench: Shri N. V. Vasudevan & Shri Laxmi Prasad Sahuassessment Year : 2014-15 Acit, Vs. M/S. Bhoruka Aluminium Ltd., No.427E, 2Nd Floor, Hebbal Industrial Circle – 1(1), Mysuru. Area, Metagalli, Mysuru – 570 016. Pan : Aaacb 8073 D Appellant Respondent Assessee By : Shri. S. Ramasubramanian, Ca Revenue By : Dr. Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 08.08.2022 Date Of Pronouncement : 16.08.2022 O R D E R Per N. V. Vasudevan:

For Appellant: Shri. S. Ramasubramanian, CAFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru
Section 2Section 288Section 35ASection 43Section 43(6)(c)Section 48Section 49Section 50B

…amount which has accrued to the respondent- assessee. The test of accrual is whether there is a right to receive the amount though later and such right is legally enforceable. In fact as observed by the Supreme Court in E.D. Sassoon & Co. Ltd. Vs. CIT (1954) 26 ITR 27 “It is clear therefore that income may accrue to an assesee without the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There mu…

Dy. Commissioner of Income Tax, Central Circle-2, Kanpur vs. Shri Mohammad Asfand Akhtar, Kanpur

In the result, the appeal of the Revenue stands dismissed

ITA 99/LKW/2022[2017-18]Status: DisposedITAT Lucknow05 Aug 2022AY 2017-18

Bench: Shri A. D. Jain & Shri T. S. Kapoor

Section 133ASection 143(3)Section 145Section 147

…the accrual of the liability. The argument of the learned counsel for the assessee in the present case has the familiar ring of the argument which was advanced before their Lordships of the Supreme Court in the case of F. D. Sassoon & Co. Ltd. v, CIT [1954] 26 ITR 27. There too it was urged that the managing agency commission was relatable to the services rendered as managing agent and, therefore, for the period during which the transferor-managing agent rendered services as managing agent to the managed company, it became entitled to the managing agency commission for the aforementioned period and for the rema…

Asian Paints Ltd, Mumbai vs. Addl CIT Ltu, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 655/MUM/2017[2011-12]Status: DisposedITAT Mumbai28 Jul 2022AY 2011-12

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Asian Paints Ltd., V. Addl. Cit – Ltu – 2 6A, Shantinagar 29Th Floor, World Trade Centre Santacruz (East) Cuffe Parade, Mumbai - 400005 Mumbai – 400055 Pan: Aaaca3622K (Appellant) (Respondent) Addl. Cit – Ltu – 2 V. M/S. Asian Paints Ltd., Centre-1, 29Th Floor 6A, Shantinagar World Trade Centre Santacruz (East) Cuffe Parade, Mumbai - 400005 Mumbai – 400055 Pan: Aaaca3622K (Appellant) (Respondent)

For Appellant: Shri Madhur AgarwalFor Respondent: Shri S.K. Das
Section 115OSection 14A

…The basic principle of accrual of income is that the assessee must have acquired a right to receive the same; there must be a debt owed by somebody to him. In this context, we would like to rely upon the Apex Court decision in the case of E.D. Sasson V. CIT (26 ITR 27). The relevant extracts of the decision are re-produced as under: "If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be debt owed to him by somebod…

Red Hat India P.Ltd, Mumbai vs. DCIT, Circle 15(3)(1), Mumbai

In the result, all the appeals filed by the assessee are partly allowed and all the appeals filed by the revenue are dismissed

ITA 5831/MUM/2017[2006-07]Status: DisposedITAT Mumbai28 Jul 2022AY 2006-07

Bench: Shri Amit Shukla, Jm & Shri S. Rifaur Rahman, Am 1. आयकरअपीलसं./ I.T.A. No. 5831/Mum/2017 (ननधधारणवर्ा / Assessment Year: 2006-07) 2. आयकरअपीलसं./ I.T.A. No. 5833/Mum/2017 (ननधधारणवर्ा / Assessment Year: 2009-10) 3. आयकरअपीलसं./ I.T.A. No. 5834/Mum/2017 (ननधधारणवर्ा / Assessment Year: 2010-11) Dcit Cir-15(3)(1), M/S Red Hat India Pvt. Ltd. Aayakar Bhavan, A 201, Supreme Business Park, बनाम/ Mumbai-400 020 Supreme City, Hiranandani Vs. Gardens, Powai, Mumbai-400 076 स्थधयीलेखधसं./जीआइआरसं./ Pan No. Aabcr7097N (अपीलधथी/Appellant) (प्रत्यथी / Respondent) : & 5. आयकरअपीलसं./ I.T.A. No. 6034/Mum/2017 (ननधधारणवर्ा / Assessment Year: 2006-07) 6. आयकरअपीलसं./ I.T.A. No. 6036/Mum/2017 (ननधधारणवर्ा / Assessment Year: 2009-10) 7. आयकरअपीलसं./ I.T.A. No. 6037/Mum/2017 (ननधधारणवर्ा / Assessment Year: 2010-11) M/S Red Hat India Pvt. Ltd. Dcit Cir-15(3)(1), R. No. 473, Aayakar A 201, Supreme Business बनाम/ Bhavan, New Marine Lines, Park, Supreme City, Vs. Mumbai-400 020 Hiranandani Gardens, Powai, Mumbai-400 076 स्थधयीलेखधसं./जीआइआरसं./ Pan No. Aabcr7097N (अपीलधथी/Appellant) (प्रत्यथी / Respondent) :

For Appellant: Shri Ajit Jain & Shri SiddeshFor Respondent: Ms. Bharati Singh, Ld. DR
Section 143(3)Section 147Section 234ASection 9(1)(vi)

…hi High Court in the case of CIT vs. Dinesh Kumar Goel (197 Taxman 375) by relying 15 I.T.A. No. 5831/Mum/2017 & Others M/s Red Hat India Pvt. Ltd. upon the decision rendered by the Hon’ble Supreme Court in the case of E.D. Sassoon & Co. Ltd. vs. CIT (1954) 26 ITR 27, wherein the issue “whether the customer had paid entire fee in advance on which services remained due to be rendered in succeeding years, such receipts could not be considered as income accrued in the year of receipts”, has been decided by the Hon’ble High Court by returning the following findings: “Reading of the accounting standard makes it clea…

Seshasayee Paper and Boards Ltd., Erode vs. DCIT Namakkal Circle, Namakkal

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

ITA 2835/CHNY/2017[2003-04]Status: DisposedITAT Chennai22 Jul 2022AY 2003-04

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwal

For Appellant: Shri G. Baskar, AdvocateFor Respondent: Shri P. Sajit Kumar, JCIT
Section 143(3)Section 243Section 244Section 244A

…e u/s 244A of the Act, along with the refund, fully satisfies the requirements of Sections 4 and 5 of the Act and, therefore, it has to be taxed in the year of its receipt. The judgment of the Supreme Court in the case of E.D. Sassoon & Co. Ltd. Vs CIT [1954] 26 ITR 27 squarely supports this view. The fact that the quantum of such interest might vary at a later date, because of one of the reasons mentioned in sub-Section (3) of Section 2444, does not affect this conclusion. 19. Therefore, we respectfully follow the decision of the Tribunal (SB) (supra) and reverse the orders of the CIT(A) on this point and resto…