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 367,154 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

M/S Bellary Iron-Ores Private Limited, Bellary vs. The Assistant Commissioner of Income Tax Circle-1, Bellary

ITA 15/BANG/2019[2015-16]Status: DisposedITAT Bangalore20 Sept 2023AY 2015-16

Bench: Shri Chandra Poojari & Ms. Madhumita Royassessment Year: 2014-15

For Appellant: Shri Shivprasad Reddy, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 102Section 139(1)Section 173Section 194ASection 226(3)

…T-IT) order dated, 09-09-2019 was pleased to pass an interim order directing the banks not to make TDS pending conclusion of the proceedings by the Hon’ble CBI Court, Hyderabad. 4.19 He submitted that in the case of Godhra Electricity Co. Ltd. vs. CIT (1987) 225 ITR 746 (SC), the Hon’ble Supreme Court had an occasion to consider whether the income in respect of enhanced electricity charges collected by the assessee amounted to income or not, following the mercantile system of accounting on the basis of which the books of account were maintained, in view of Civil Suits filed by the consumers. The Civil Suits were…

M/S Bellary Iron-Ores Pvt Ltd, Bellary vs. The Income Tax Officer Ward-2, Hospet

ITA 1540/BANG/2018[2014-15]Status: DisposedITAT Bangalore20 Sept 2023AY 2014-15

Bench: Shri Chandra Poojari & Ms. Madhumita Royassessment Year: 2014-15

For Appellant: Shri Shivprasad Reddy, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 102Section 139(1)Section 173Section 194ASection 226(3)

…T-IT) order dated, 09-09-2019 was pleased to pass an interim order directing the banks not to make TDS pending conclusion of the proceedings by the Hon’ble CBI Court, Hyderabad. 4.19 He submitted that in the case of Godhra Electricity Co. Ltd. vs. CIT (1987) 225 ITR 746 (SC), the Hon’ble Supreme Court had an occasion to consider whether the income in respect of enhanced electricity charges collected by the assessee amounted to income or not, following the mercantile system of accounting on the basis of which the books of account were maintained, in view of Civil Suits filed by the consumers. The Civil Suits were…

Suresh Kumar, Chennai vs. DCIT, Central Circle-3(3), Chennai

In the result, appeal filed by the assessee is allowed

ITA 167/CHNY/2023[2019-20]Status: DisposedITAT Chennai31 Aug 2023AY 2019-20

Bench: Shri Mahavir Singh, Hon’Ble & Shri Manjunatha. G, Hon’Bleआयकर अपील सं./Ita No.: 167/Chny/2023 िनधा"रण वष" / Assessment Year: 2019-20 Suresh Kumar, Deputy Commissioner Of 114/10 (Ligh), Gandhi Road, V. Income Tax, West Tambaram, Central Circle 1(3), Chennai – 600 045. Chennai – 600 034. [Pan: Aagps-0396-D] (अपीलाथ"/Appellant) (""यथ"/Respondent) : Shri. D. Anand, Advocate अपीलाथ" क" ओर से/Appellant By ""यथ" क" ओर से/Respondent By : Shri. Ar V Sreenivasan, Addl. Cit सुनवाई क" तारीख/Date Of Hearing : 16.08.2023 घोषणा क" तारीख/Date Of Pronouncement : 31.08.2023 आदेश /O R D E R

For Respondent: Shri. AR V Sreenivasan, Addl. CIT
Section 131Section 133ASection 69B

…ion 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 interest. It is submitted that the lower authorities have…

Income Tax Officer-1, Raigarh vs. M/S Sumit Global Pvt. Ltd, Raigarh

In the result appeal of the revenue is partly allowed

ITA 97/RPR/2018[2013-14]Status: DisposedITAT Raipur09 Aug 2023AY 2013-14

Bench: SHRI RAVISH SOOD (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

For Respondent: Shri V.K.Singh, CIT-DR
Section 143(1)

…47) of the Income Tax Act, consequently no income accrued u/s 5 r.w.s. 45 of the CO No.10/RPR/18 Income Tax Act. In support of his aforesaid contention, the Ld. AR relied on the following judicial pronouncements: (i) Godhara Electricity Co Ltd. Vs. CIT (1997) 225 ITR 746 (SC) Held : Section 5 of the Income-tax Act, 1961 - Income - Accrual of - Assessment years 1969-70 to 1972-73 - Assessee-company a licencee to generate and supply electricity to its consumers, from 1963 enhanced tariff - Suit was filed by consumers which was decreed against assessee ultimately - Supreme Court decided dispute in favour of assessee…

Shri Shyamsundar Soni Karta HUF, Bikaner vs. ACIT, Circle, Bikaner

In the results the appeal filed by the

ITA 67/JODH/2023[2019-20]Status: DisposedITAT Jodhpur07 Aug 2023AY 2019-20

Bench: Its Hearing Before Your Honours.”

Section 115BSection 131Section 133ASection 139(1)Section 147Section 148Section 234A

…and duty entitlement pass book and paid tax thereon—Therefore, it was not as if revenue has been deprived of any tax—Rate of tax remained same—There was, thus, no need for revenue to continue with this litigation. • GODHRA ELECTRICITY CO. LTD. vs. CIT (1997) 225 ITR 746 (SC) Under the Act income charged to tax is the income that is received or is deemed to be received in India in the previous year relevant to the year for which assessment is made or on the income that accrues or arises or is deemed to accrue or arise in India during such year. The computation of such income is to be made in accordance with the m…

Shri Shyamsundar Soni Karta HUF, Bikaner vs. ACIT, Circle, Bikaner

In the results the appeal filed by the

ITA 66/JODH/2023[2018-19]Status: DisposedITAT Jodhpur07 Aug 2023AY 2018-19

Bench: Its Hearing Before Your Honours.”

Section 115BSection 131Section 133ASection 139(1)Section 147Section 148Section 234A

…and duty entitlement pass book and paid tax thereon—Therefore, it was not as if revenue has been deprived of any tax—Rate of tax remained same—There was, thus, no need for revenue to continue with this litigation. • GODHRA ELECTRICITY CO. LTD. vs. CIT (1997) 225 ITR 746 (SC) Under the Act income charged to tax is the income that is received or is deemed to be received in India in the previous year relevant to the year for which assessment is made or on the income that accrues or arises or is deemed to accrue or arise in India during such year. The computation of such income is to be made in accordance with the m…

Shri Shyamsundar Soni Karta HUF, Bikaner vs. ACIT, Circle, Bikaner

In the results the appeal filed by the

ITA 65/JODH/2023[2017-18]Status: DisposedITAT Jodhpur07 Aug 2023AY 2017-18

Bench: Its Hearing Before Your Honours.”

Section 115BSection 131Section 133ASection 139(1)Section 147Section 148Section 234A

…and duty entitlement pass book and paid tax thereon—Therefore, it was not as if revenue has been deprived of any tax—Rate of tax remained same—There was, thus, no need for revenue to continue with this litigation. • GODHRA ELECTRICITY CO. LTD. vs. CIT (1997) 225 ITR 746 (SC) Under the Act income charged to tax is the income that is received or is deemed to be received in India in the previous year relevant to the year for which assessment is made or on the income that accrues or arises or is deemed to accrue or arise in India during such year. The computation of such income is to be made in accordance with the m…

Shri Shyamsundar Soni Karta HUF, Bikaner vs. ACIT, Circle, Bikaner

In the results the appeal filed by the

ITA 64/JODH/2023[2016-17]Status: DisposedITAT Jodhpur07 Aug 2023AY 2016-17

Bench: Its Hearing Before Your Honours.”

Section 115BSection 131Section 133ASection 139(1)Section 147Section 148Section 234A

…and duty entitlement pass book and paid tax thereon—Therefore, it was not as if revenue has been deprived of any tax—Rate of tax remained same—There was, thus, no need for revenue to continue with this litigation. • GODHRA ELECTRICITY CO. LTD. vs. CIT (1997) 225 ITR 746 (SC) Under the Act income charged to tax is the income that is received or is deemed to be received in India in the previous year relevant to the year for which assessment is made or on the income that accrues or arises or is deemed to accrue or arise in India during such year. The computation of such income is to be made in accordance with the m…

Shri Shyamsundar Soni Karta HUF, Bikaner vs. ACIT, Circle, Bikaner

In the results the appeal filed by the

ITA 63/JODH/2023[2015-16]Status: DisposedITAT Jodhpur07 Aug 2023AY 2015-16

Bench: Its Hearing Before Your Honours.”

Section 115BSection 131Section 133ASection 139(1)Section 147Section 148Section 234A

…and duty entitlement pass book and paid tax thereon—Therefore, it was not as if revenue has been deprived of any tax—Rate of tax remained same—There was, thus, no need for revenue to continue with this litigation. • GODHRA ELECTRICITY CO. LTD. vs. CIT (1997) 225 ITR 746 (SC) Under the Act income charged to tax is the income that is received or is deemed to be received in India in the previous year relevant to the year for which assessment is made or on the income that accrues or arises or is deemed to accrue or arise in India during such year. The computation of such income is to be made in accordance with the m…

Shri Shyamsundar Soni Karta HUF, Bikaner vs. ACIT, Circle, Bikaner

In the results the appeal filed by the

ITA 62/JODH/2023[2014-15]Status: DisposedITAT Jodhpur07 Aug 2023AY 2014-15

Bench: Its Hearing Before Your Honours.”

Section 115BSection 131Section 133ASection 139(1)Section 147Section 148Section 234A

…and duty entitlement pass book and paid tax thereon—Therefore, it was not as if revenue has been deprived of any tax—Rate of tax remained same—There was, thus, no need for revenue to continue with this litigation. • GODHRA ELECTRICITY CO. LTD. vs. CIT (1997) 225 ITR 746 (SC) Under the Act income charged to tax is the income that is received or is deemed to be received in India in the previous year relevant to the year for which assessment is made or on the income that accrues or arises or is deemed to accrue or arise in India during such year. The computation of such income is to be made in accordance with the m…

Shri Shyamsundar Soni Karta HUF, Bikaner vs. ACIT, Circle, Bikaner

In the results the appeal filed by the

ITA 61/JODH/2023[2013-14]Status: DisposedITAT Jodhpur07 Aug 2023AY 2013-14

Bench: Its Hearing Before Your Honours.”

Section 115BSection 131Section 133ASection 139(1)Section 147Section 148Section 234A

…and duty entitlement pass book and paid tax thereon—Therefore, it was not as if revenue has been deprived of any tax—Rate of tax remained same—There was, thus, no need for revenue to continue with this litigation. • GODHRA ELECTRICITY CO. LTD. vs. CIT (1997) 225 ITR 746 (SC) Under the Act income charged to tax is the income that is received or is deemed to be received in India in the previous year relevant to the year for which assessment is made or on the income that accrues or arises or is deemed to accrue or arise in India during such year. The computation of such income is to be made in accordance with the m…

Assistant Commissioner of Income Tax Circle- 2(1), Bilaspur vs. M/S Jila Sahkari Kendriya Bank Maryadit, Bilaspur

In the result, the appeal filed by the revenue is allowed in terms of our aforesaid observations

ITA 92/RPR/2018[2012-13]Status: DisposedITAT Raipur04 Jul 2023AY 2012-13

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No. 92/Rpr/2018 "नधा"रण वष" / Assessment Year : 2012-13 The Assistant Commissioner Of Income Tax, Circle-2(1), Bilaspur .......अपीलाथ" / Appellant बनाम / V/S. M/S. Jila Sahakari Kendriya Bank Maryadit, Sahakari Bhawan, Nehru Chowk, Bilaspur (C.G.) Pan : Aaaaj0607P ……""यथ" / Respondent

For Appellant: Shri Nikhilesh Begani, CAFor Respondent: Smt. Ila M. Parmar, CIT-DR
Section 143(3)Section 263(1)

…Ltd. Vs. CIT (2016) 385 ITR 60 (SC) (iii) Morvi Industries Ltd. Vs. CIT (1971) 82 ITR 835 (SC) (iv) CIT Vs. Ashokbhai Chimanbhai (1965) 56 ITR 42 (SC) (v) E.D. Sasson & Company Ltd. Vs. CIT (1954) 26 ITR 27 (SC) (vi) Godhra Electricity Co. Ltd. Vs. CIT (1997) 225 ITR 746 (SC) (vii) CIT Vs. Birla Gwalior (P) Ltd. (1973) 89 ITR 266 (SC) (viii) CIT Vs. Suman Dhamija (2016) 382 ITR 343 (SC) (ix) CIT Vs. Bechtel International Inc. (2019) 414 ITR 558 (Bom. HC) (x) CIT Vs. Asea Brown Boveri Ltd. (2020) 427 ITR 166 ( Kar.HC) (xi) CIT Vs. Mahalaxmi Textile Mill Ltd. (1967) 66 ITR 710 (SC) (xii) Wipro Finance Ltd. Vs. CIT…

Assistant Commissioner of Income Tax Circle-1, Jammu vs. Gravita Metal Inc, Kathua

ITA 594/ASR/2019[2016-17]Status: DisposedITAT Amritsar15 Jun 2023AY 2016-17

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

For Appellant: Shri. P.C. Parwal, CAFor Respondent: Shri Rohit Mehra, CIT DR
Section 10Section 2(24)Section 2(24)(xviii)

…income has accrued or not. (4) The concept of real income is certainly applicable in judging whether there has been income or not but, in every case, it must be applied with care and within well- recognised limits. Godhra Electricity Co. Ltd. Vs. CIT (1997) 225 ITR 746 (SC) The assessee company was engaged in the business of generation & supply of electricity. It was entitled under the relevant law to decide on the tariff to be charged from its consumers. It increased its tariff against which consumers entered into litigation. Pending such disputes, assessee company in its books of accounts recognized the reven…

Measage Gravita Metal Inc, Kathua vs. Income Tax Officer Ward- 1(4), Kathua

ITA 587/ASR/2019[2016-17]Status: DisposedITAT Amritsar15 Jun 2023AY 2016-17

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

For Appellant: Shri. P.C. Parwal, CAFor Respondent: Shri Rohit Mehra, CIT DR
Section 10Section 2(24)Section 2(24)(xviii)

…income has accrued or not. (4) The concept of real income is certainly applicable in judging whether there has been income or not but, in every case, it must be applied with care and within well- recognised limits. Godhra Electricity Co. Ltd. Vs. CIT (1997) 225 ITR 746 (SC) The assessee company was engaged in the business of generation & supply of electricity. It was entitled under the relevant law to decide on the tariff to be charged from its consumers. It increased its tariff against which consumers entered into litigation. Pending such disputes, assessee company in its books of accounts recognized the reven…

DCIT, New Delhi vs. M/S. Sahara India Power Corporation Ltd., Pune

In the result, the appeal filed by the revenue for the AY 2005-06 in I

ITA 5067/DEL/2013[2005-06]Status: PendingITAT Delhi28 Apr 2023AY 2005-06

Bench: Dr. B.R.R. Kumar & Shri Yogesh Kumar Us

For Appellant: Shri Ajay VohraFor Respondent: Shri Kanv Bali

…l of the Revenue is dismissed." (emphasis supplied)” 36. Reliance is also placed by the ld. A.R. on the following decisions wherein it has been categorically held that income-tax cannot be levied on hypothetical income: • Godhra Electricity Co. Ltd. v. CIT : 225 ITR 746 (SC) • CIT v. Excel Industries Ltd :358 ITR 295 (SC) • CIT v. Shoorji Vallabhdas &Co : 46 ITR 144 (SC) • Airport Authority of India v. CIT : 340 ITR 407 (Del.) • CIT v. Ferozepur Finance (P.) Ltd : 124 ITR 619 (P&H) • CIT v. Motor Credit Co. (P.) Ltd : 127 ITR 572 (Mad.) 37. In the aforesaid circumstances, where the income of the Assessee never…

Sahara India Power Corporation Ltd, Pune vs. DCIT, New Delhi

In the result, the appeal filed by the revenue for the AY 2005-06 in I

ITA 1155/DEL/2009[2004-05]Status: DisposedITAT Delhi28 Apr 2023AY 2004-05

Bench: Dr. B.R.R. Kumar & Shri Yogesh Kumar Us

For Appellant: Shri Ajay VohraFor Respondent: Shri Kanv Bali

…l of the Revenue is dismissed." (emphasis supplied)” 36. Reliance is also placed by the ld. A.R. on the following decisions wherein it has been categorically held that income-tax cannot be levied on hypothetical income: • Godhra Electricity Co. Ltd. v. CIT : 225 ITR 746 (SC) • CIT v. Excel Industries Ltd :358 ITR 295 (SC) • CIT v. Shoorji Vallabhdas &Co : 46 ITR 144 (SC) • Airport Authority of India v. CIT : 340 ITR 407 (Del.) • CIT v. Ferozepur Finance (P.) Ltd : 124 ITR 619 (P&H) • CIT v. Motor Credit Co. (P.) Ltd : 127 ITR 572 (Mad.) 37. In the aforesaid circumstances, where the income of the Assessee never…

Sahara India Power Corporation Ltd., Pune vs. Assistant Commissioner of Income-Tax

In the result, the appeal filed by the revenue for the AY 2005-06 in I

ITA 109/PUN/2007[2003-04]Status: DisposedITAT Delhi28 Apr 2023AY 2003-04

Bench: Dr. B.R.R. Kumar & Shri Yogesh Kumar Us

For Appellant: Shri Ajay VohraFor Respondent: Shri Kanv Bali

…l of the Revenue is dismissed." (emphasis supplied)” 36. Reliance is also placed by the ld. A.R. on the following decisions wherein it has been categorically held that income-tax cannot be levied on hypothetical income: • Godhra Electricity Co. Ltd. v. CIT : 225 ITR 746 (SC) • CIT v. Excel Industries Ltd :358 ITR 295 (SC) • CIT v. Shoorji Vallabhdas &Co : 46 ITR 144 (SC) • Airport Authority of India v. CIT : 340 ITR 407 (Del.) • CIT v. Ferozepur Finance (P.) Ltd : 124 ITR 619 (P&H) • CIT v. Motor Credit Co. (P.) Ltd : 127 ITR 572 (Mad.) 37. In the aforesaid circumstances, where the income of the Assessee never…

DCIT Circle-7(1), Delhi vs. Empire Stocks Pvt. Ltd., Delhi

In the result, appeal of the revenue is dismissed

ITA 1221/DEL/2022[2018-19]Status: DisposedITAT Delhi19 Apr 2023AY 2018-19
Section 143(3)Section 36(1)(iii)

…n the instant case would not be comparable with the interest rate prevailing in ordinary loan transaction. The ld. CIT(A) thereafter by placing reliance on the decision of Hon’ble Supreme Court in the case of Godhra Electricity Company Ltd. vs CIT reported in 225 ITR 746 held that only real income could be brought to tax and not the notional income. The Ld. CIT(A) also placed reliance on various other decisions in support of this proposition and granted relief to the assessee. Aggrieved the revenue is in appeal before us. 5. It is not in dispute that the borrowed funds were used by the assessee for the purpose o…

M/S Overseas Leathers, Ranipet vs. DCIT, Chennai

In the result, appeal filed by the assessee is allowed

ITA 962/CHNY/2022[2018-19]Status: DisposedITAT Chennai05 Apr 2023AY 2018-19

Bench: Shri Aby T. Varkey, Hon’Ble & Shri Manjunatha. G, Hon’Bleआयकर अपील सं./Ita No.: 962/Chny/2022 िनधा"रण वष" / Assessment Year: 2018-19 M/S. Overseas Leathers, Deputy Commissioner Of No. 131, Sidco Industrial V. Income-Tax, Estates, Central Circle -3(3), Sipcot, Ranipet, Ranipet New No. 46, Old No. 108, District – 632 403 Mahatma Gandhi Road, [Pan: Aaafo-0375-L] Chennai – 600 034. (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri. D. Anand, Advocate : Shri. P. Sajit Kumar, Jcit ""यथ" क" ओर से/Respondent By सुनवाई की तारीख/Date Of Hearing : 20.03.2023 घोषणा की तारीख/Date Of Pronouncement : 05.04.2023

For Appellant: Shri. D. Anand, Advocate
Section 115BSection 69B

…ion 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 interest. It is submitted that the lower authorities have…

M/S Shriram Properties Limited, Chennai vs. PCIT-Central1, Chennai

In the result, appeal filed by the assessee is allowed

ITA 431/CHNY/2022[2017-18]Status: DisposedITAT Chennai20 Mar 2023AY 2017-18

Bench: Shri V. Durga Rao, Hon’Ble & Shri Manjunatha. G, Hon’Bleआयकर अपील सं./Ita No.: 431/Chny/2022 िनधा"रण वष" / Assessment Year: 2017-18

For Appellant: Shri. Ananthan, CA & Ms. Lalitha. RFor Respondent: Shri. S. Senthil Kumaran, CIT
Section 143(3)Section 263Section 56(2)(vii)

…आयकर अपीलीय अिधकरण, ‘बी’ "यायपीठ, चे"ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI "ी वी दुगा" राव, "याियक सद"य एवं "ी मंजुनाथ. जी, लेखा सद"य के सम" BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 431/Chny/2022 िनधा"रण वष" / Assessment Year: 2017-18 M/s. Shriram Properties Principal Commissioner of Limited, v. Income Tax (Central), New No.9, Lakshmi Neela Rite Chennai -1. Choice Chambers, Bazullah Road, T-Nagar, Chennai – 600 017. [PAN: AAFCS-5801-D] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant by : S…