Godhra Electricity Co. Ltd. v. CIT

225 ITR 746Supreme Court of India1997#130 most cited

What is Godhra Electricity Co. Ltd. v. CIT authority for?

Income is not taxable until it actually accrues or is received; hypothetical income, based on a mere claim not yet settled, is not chargeable to tax.

514

judgments rely on this decision, according to BharatTax’s citation analysis of 367,164 Indian tax judgments — from 2009 to 2026.

Also referred to as

Godhra Electricity Co. Ltd. v. CIT · income accrual · hypothetical income · actual receipt · unconfirmed claims · income tax

Sections most often in play

Section 143(3)Section 147Section 148Section 14ASection 40A(3)Section 37(1)Section 142(2A)Section 153A

Issues it is cited on

section 10(31a)section 100section 76undisclosed foreign income and assetssection 142(2c)section 149(1)(c)section 4(2)section 153b(1)(b)section 201(3)section 158basection 153b(1)rectification under section 154

Judgments citing Godhra Electricity Co. Ltd. v. CIT

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

…sessee 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 the form of BWIPL in assessment years 2007-08 and 2008-09, learned counsel submitted that the issue is academic in nat…

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

…sessee 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 the form of BWIPL in assessment years 2007-08 and 2008-09, learned counsel submitted that the issue is academic in nat…

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

…sessee 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 the form of BWIPL in assessment years 2007-08 and 2008-09, learned counsel submitted that the issue is academic in nat…

M/S. Coromandel Sugars Ltd., Chennai vs. DCIT, CC - 1 (2), Chennai

In the result, the appeals filed by the assessee in ITA

ITA 3391/CHNY/2019[2013-14]Status: DisposedITAT Chennai16 Nov 2022AY 2013-14

Bench: Shri Mahavir Singhand Shri G. Manjunathaआयकरअपीलसं./Ita Nos.: 3390 & 3391/Chny/2019 िनधा"रण वष"/Assessment Years: 2005-06 & 2013 - 14 Coromandel Sugars Ltd., The Dcit, No.93, Santhome High Road, Vs. Corporate Circle -1(2), R.A. Puram, Chennai. Chennai – 600 028. Pan: Aaaci 2702G (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri R. Vijayaraghavan, Advocate ""यथ" क" ओर से/Respondent By : Shri Ar.V. Sreenivasan, Addl.Cit सुनवाई क" तार"ख/Date Of Hearing : 02.11.2022 घोषणा क" तार"ख/Date Of Pronouncement : 16.11.2022 आदेश /O R D E R Per Mahavir Singh: These Appeals By The Assessee Are Arising Out Of The Common Order Of The Commissioner Of Income Tax (Appeals)-4(I/C), Chennai In Ita Nos.434 & 433/16-17/Cit(A)-4/Ays 2005-06 & 2013-14 Dated 09.09.2019. The Assessments Were Framed U/S.143(3) Of The Income Tax Act, 1961 (Hereinafter The ‘Act’) By The Acit, Company Circle Ii(3), Chennai For The Assessment Year 2005-06

For Appellant: Shri R. Vijayaraghavan, AdvocateFor Respondent: Shri AR.V. Sreenivasan, Addl.CIT
Section 143(3)

…income accrues but only has hypothetical income accrued to the assessee. This case will be applicable to the facts of the case but he argued that the Hon’ble Supreme Court has categorically followed the decision of Godhra Electricity Co.Ltd., vs. CIT, (1997) 225 ITR 746, wherein it - 8 - ITA Nos.3390 & 3391/Chny/2019 is held that “what has really accrued to the assessee has to be found out and what has accrued must be considered from the point of view of real income taking the probability or improbability of realization in a realistic manner and dovetailing of these factors together but once the accrual takes…

M/S. Coromandel Sugars Ltd., Chennai vs. DCIT, CC - 1 (2), Chennai

In the result, the appeals filed by the assessee in ITA

ITA 3390/CHNY/2019[2005-06]Status: DisposedITAT Chennai16 Nov 2022AY 2005-06

Bench: Shri Mahavir Singhand Shri G. Manjunathaआयकरअपीलसं./Ita Nos.: 3390 & 3391/Chny/2019 िनधा"रण वष"/Assessment Years: 2005-06 & 2013 - 14 Coromandel Sugars Ltd., The Dcit, No.93, Santhome High Road, Vs. Corporate Circle -1(2), R.A. Puram, Chennai. Chennai – 600 028. Pan: Aaaci 2702G (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri R. Vijayaraghavan, Advocate ""यथ" क" ओर से/Respondent By : Shri Ar.V. Sreenivasan, Addl.Cit सुनवाई क" तार"ख/Date Of Hearing : 02.11.2022 घोषणा क" तार"ख/Date Of Pronouncement : 16.11.2022 आदेश /O R D E R Per Mahavir Singh: These Appeals By The Assessee Are Arising Out Of The Common Order Of The Commissioner Of Income Tax (Appeals)-4(I/C), Chennai In Ita Nos.434 & 433/16-17/Cit(A)-4/Ays 2005-06 & 2013-14 Dated 09.09.2019. The Assessments Were Framed U/S.143(3) Of The Income Tax Act, 1961 (Hereinafter The ‘Act’) By The Acit, Company Circle Ii(3), Chennai For The Assessment Year 2005-06

For Appellant: Shri R. Vijayaraghavan, AdvocateFor Respondent: Shri AR.V. Sreenivasan, Addl.CIT
Section 143(3)

…income accrues but only has hypothetical income accrued to the assessee. This case will be applicable to the facts of the case but he argued that the Hon’ble Supreme Court has categorically followed the decision of Godhra Electricity Co.Ltd., vs. CIT, (1997) 225 ITR 746, wherein it - 8 - ITA Nos.3390 & 3391/Chny/2019 is held that “what has really accrued to the assessee has to be found out and what has accrued must be considered from the point of view of real income taking the probability or improbability of realization in a realistic manner and dovetailing of these factors together but once the accrual takes…

The Deputy Commr. of Income Tax, Circle-2 (1), Rajkot-Gujarat vs. Shri Girish R. Tanti, Rajkot-Gujarat

In the result, appeal of the Department is dismissed

ITA 113/RJT/2018[2011-12]Status: DisposedITAT Rajkot31 Oct 2022AY 2011-12
For Appellant: Shri Mehul Ranpura, A.RFor Respondent: Shri Shramdeep Sinha, Sr. D.R
Section 139Section 143(3)Section 263

…AIR 1969 Ori 187 emphasized that income tax is imposed only on “profits he actually receives and not on the profits he might have, but has not received”. This real accrual of income test was elaborated by the Supreme Court in Godhra Electricity Company(1997) 225 ITR 746. In this case, a Government Circular entitled the assessee to recover consumption charges from its customers at enhanced rates. As this order was the subject matter of protracted litigation, the assessee was unable to recover the enhanced charges. Consequently, the assessee challenged the inclusion of such amount within its assessable income on t…

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

…. 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 interest payment of Rs.6.52 Crores, a sum of Rs.1.93 Crores was paid as interest on term loans which could not have been us…

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

…. 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 interest payment of Rs.6.52 Crores, a sum of Rs.1.93 Crores was paid as interest on term loans which could not have been us…

Corrtech International Pvt. Ltd., Ahmedabad vs. The Addl. CIT, TDS Range, Ahmedabad

ITA 2408/AHD/2017[2015-16]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2015-16

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…into account in this assessment year. The Ld. A.R. submitted that it is a well settle that only real income can be taxed by the Revenue and not notional income. The Ld. A.R. submitted that the Hon’ble Apex Court in case of Godhra Electricity Co. Ltd. vs. CIT, 225 ITR 746 (SC) has also stipulated the said principle. 37. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the addition is made on the amount which was not received by the assessee during the present assessment year. Subsequently, the assessee has offered the said amount/settlement amo…

Corrtech International Pvt. Ltd., Ahmedabad vs. The Addl. CIT, TDS Range, Ahmedabad

ITA 2406/AHD/2017[2014-15]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2014-15

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…into account in this assessment year. The Ld. A.R. submitted that it is a well settle that only real income can be taxed by the Revenue and not notional income. The Ld. A.R. submitted that the Hon’ble Apex Court in case of Godhra Electricity Co. Ltd. vs. CIT, 225 ITR 746 (SC) has also stipulated the said principle. 37. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the addition is made on the amount which was not received by the assessee during the present assessment year. Subsequently, the assessee has offered the said amount/settlement amo…

The Deputy Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad vs. M/S. Corrtech International Pvt. Ltd., Ahmedabad

ITA 1358/AHD/2017[2010-11]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2010-11

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…into account in this assessment year. The Ld. A.R. submitted that it is a well settle that only real income can be taxed by the Revenue and not notional income. The Ld. A.R. submitted that the Hon’ble Apex Court in case of Godhra Electricity Co. Ltd. vs. CIT, 225 ITR 746 (SC) has also stipulated the said principle. 37. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the addition is made on the amount which was not received by the assessee during the present assessment year. Subsequently, the assessee has offered the said amount/settlement amo…

Corrtech International Pvt.Ltd., Ahmedabad vs. Dy. Commissioner of Income Tax, (OSD), Ahmedabad

ITA 821/AHD/2015[2008-09]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2008-09

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…into account in this assessment year. The Ld. A.R. submitted that it is a well settle that only real income can be taxed by the Revenue and not notional income. The Ld. A.R. submitted that the Hon’ble Apex Court in case of Godhra Electricity Co. Ltd. vs. CIT, 225 ITR 746 (SC) has also stipulated the said principle. 37. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the addition is made on the amount which was not received by the assessee during the present assessment year. Subsequently, the assessee has offered the said amount/settlement amo…

The DCIT(OSD) Range-1, Ahmedabad vs. M/S. Corrtech International Pvt.Ltd., Ahmedabad

ITA 1129/AHD/2015[2008-09]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2008-09

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…into account in this assessment year. The Ld. A.R. submitted that it is a well settle that only real income can be taxed by the Revenue and not notional income. The Ld. A.R. submitted that the Hon’ble Apex Court in case of Godhra Electricity Co. Ltd. vs. CIT, 225 ITR 746 (SC) has also stipulated the said principle. 37. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the addition is made on the amount which was not received by the assessee during the present assessment year. Subsequently, the assessee has offered the said amount/settlement amo…

Corrtech International Pvt.Ltd., Ahmedabad vs. The ACIT., (OSD) Range-1, Ahmedabad

ITA 2652/AHD/2014[2010-11]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2010-11

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…into account in this assessment year. The Ld. A.R. submitted that it is a well settle that only real income can be taxed by the Revenue and not notional income. The Ld. A.R. submitted that the Hon’ble Apex Court in case of Godhra Electricity Co. Ltd. vs. CIT, 225 ITR 746 (SC) has also stipulated the said principle. 37. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the addition is made on the amount which was not received by the assessee during the present assessment year. Subsequently, the assessee has offered the said amount/settlement amo…

The DCIT(OSD) Range-1, Ahmedabad vs. M/S. Corrtech International Pvt.Ltd., Ahmedabad

ITA 2578/AHD/2014[2010-11]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2010-11

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…into account in this assessment year. The Ld. A.R. submitted that it is a well settle that only real income can be taxed by the Revenue and not notional income. The Ld. A.R. submitted that the Hon’ble Apex Court in case of Godhra Electricity Co. Ltd. vs. CIT, 225 ITR 746 (SC) has also stipulated the said principle. 37. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the addition is made on the amount which was not received by the assessee during the present assessment year. Subsequently, the assessee has offered the said amount/settlement amo…

The DCIT(OSD)Range-1, Ahmedabad vs. Corrtech International Pvt.Ltd., Ahmedabad

ITA 1871/AHD/2012[2009-10]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2009-10

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…into account in this assessment year. The Ld. A.R. submitted that it is a well settle that only real income can be taxed by the Revenue and not notional income. The Ld. A.R. submitted that the Hon’ble Apex Court in case of Godhra Electricity Co. Ltd. vs. CIT, 225 ITR 746 (SC) has also stipulated the said principle. 37. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the addition is made on the amount which was not received by the assessee during the present assessment year. Subsequently, the assessee has offered the said amount/settlement amo…

Corrtech International Pvt.Ltd., Ahmedabad vs. The ACIT., (OSD)Range-1, Ahmedabad

ITA 1785/AHD/2012[2009-10]Status: DisposedITAT Ahmedabad19 Oct 2022AY 2009-10

Bench: Ms. Suchitra Kamble& Shri Waseem Ahmed

Section 14ASection 26(1)(iii)

…into account in this assessment year. The Ld. A.R. submitted that it is a well settle that only real income can be taxed by the Revenue and not notional income. The Ld. A.R. submitted that the Hon’ble Apex Court in case of Godhra Electricity Co. Ltd. vs. CIT, 225 ITR 746 (SC) has also stipulated the said principle. 37. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the addition is made on the amount which was not received by the assessee during the present assessment year. Subsequently, the assessee has offered the said amount/settlement amo…

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)

…[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: Interest charged under section 234A and 234B of the Act 4.1 This ground is consequential in nature. Ground No. 5: Penalty proceedings initiated under section 271(l)(c) of the Act 5.1 There shall be no levy of penalty if the aforesaid grounds are decided in f…

Swiber Offshore Construction Pte. Ltd. (Judicial Managers Appointed), Mumbai vs. Asst Clt (It) Cirlce- 4 (2)(2), Mumbai

ITA 7847/MUM/2019[2016-17]Status: DisposedITAT Mumbai29 Sept 2022AY 2016-17
For Appellant: Shri Jigar VoraFor Respondent: Shri Somendu Kumar Dash
Section 143(3)Section 144CSection 144C(13)Section 144C(5)Section 44B

…e hands of a person on whom such a claim is made. If it remains a mere 9 Assessment Year: 2016-17 claim without the force of any enforceable right to receive, practically there can be no accrual of income. In the case of Godhra Electricity Co. v. CIT [1997] 225 ITR 746 / 91 Taxman 351 (SC) the assessee electricity company, after enhancing tariff, was restrained from realizing the enhanced rate. Having never been able to receive the enhanced tariff, it was taken over by the State Electricity Board. The Revenue took the stand that since the assessee had issued the bills in respect of the enhanced tariff, such amo…

DCIT - 10(3)(2), Mumbai vs. Phonographic Performance Ltd., Mumbai

In the result, both, the appeal of the revenue and the cross objection filed by the assessee are dismissed

ITA 2976/MUM/2018[2011-12]Status: DisposedITAT Mumbai12 Sept 2022AY 2011-12

Bench: Shri Amarjit Singh () & Smt. Kavitha Rajagopal ()

Section 143(3)Section 148Section 250Section 33

…the hands of the assessee". 4. "On the facts and in the circumstances of the case and in the law, the Ld CIT(A) erred in relying upon the Apex court decision in the cases Shoorji Vallabhdas 46 ITR 144(SC), Morvi Insdustries 82 ITR 835 & Godhra Electricity Co 225 ITR 746, without considering the fact of the case". 5. "On the facts and in the circumstances of the case and in the law, the Ld CIT(A) erred in relying upon the Bombay High court decision in the case of CIT Vs Neon Solution Pvt. Ltd., without considering the fact of the case". 3. The brief facts of the case are that the assessee company is incorporated…