Mohsin Rehman Penkar v. CIT

16 ITR 183High Court1948#8223 most cited

What is Mohsin Rehman Penkar v. CIT authority for?

Remission of a liability in a subsequent assessment year, for which a deduction was obtained in an earlier year, cannot be taxed as income if the assessee maintains accounts on the mercantile system.

13

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2011 to 2023.

Also referred to as

Mohsin Rehman Penkar v CIT · 16 ITR 183 · Bombay High Court · remission of liability · income tax · mercantile system of accounting · deduction in earlier year · cessation of liability · Section 10(2A) Indian Income Tax Act 1922 · Section 41(1)

Judgments citing Mohsin Rehman Penkar v. CIT

Uretek India Private Limited, New Delhi vs. ACIT Circle-27(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 8240/DEL/2019[2015-16]Status: DisposedITAT Delhi14 Jul 2023AY 2015-16

Bench: Shri Kul Bharat & Shri M.Balaganesh[Assessment Year : 2015-16] Uretek India Pvt.Ltd., Vs Acit, C/O-Rohit Malik & Associates, Circle-27(1), 1212A, Chiranjiv Tower, 43, New Delhi. Nehru Place, New Delhi-110019. Pan-Aaacu9168L Appellant Respondent Appellant By Dr. Rakesh Gupta, Adv. & Shri Somil Agarwal, Adv. Respondent By Shri Gurpreet Shah Singh, Sr.Dr Date Of Hearing 08.06.2023 Date Of Pronouncement 14.07.2023 Order

Section 143(1)Section 41(1)Section 68

…rt observed that Section 10(2A) of the Indian Income Tax Act, 1922, which is the Mysore V. fore-runner of Section 41(1) of the present Act, was introduced w.e.f. 01.4.1955 to get over the judgment of the Bombay High Court in Mohsin Rehman Penkar v. CIT (1948) 16 ITR 183 holding that remission of a liability in a subsequent assessment year in respect of which the assessee had obtained a deduction in an earlier assessment year, can never become income for the purpose of taxation, where the assessee maintains accounts in the mercantile system of accounting. Thus, it may be seen that Section 10(2A) of the Indian Inco…

M/S. Shangrila Latex Industries Limited, Surat vs. Assistant Commissioner of Income Tax - 4, Surat

In the result, appeal filed by the assessees is allowed

ITA 38/SRT/2017[2006-07]Status: DisposedITAT Surat28 Sept 2022AY 2006-07

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.38/Srt/2017 Assessment Year: (2006-07) (Physical Court Hearing) Shangrila Latex Industries Limited, Vs. The Acit, Circle-4, C/O. B.M. Parekh & Co., 203, 2Nd Surat. Floor, Navjivan Society, Bldg. No. 03, Lamington Road, Mumbai-400008. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaics1479E (Appellant) (Respondent) Assessee By Shri Sanjay S. Kapadia, Ca Respondent By Shri H. P. Meena, Cit(Dr) Date Of Hearing 01/07/2022 28/09/2022 Date Of Pronouncement

Section 143(3)Section 147Section 148Section 234BSection 71

…ove fact there is no cessation of trading liability but that of capital asset. The above action of the assessee is supported by the decision of the judiciary in the following cases wherein it was held as under: In the case of Mohsin Rehman Penkar Vs CIT(1948) 16 ITR 183 (Bom) endorsed by the Supreme Court in the case of C. Ag It Vs. Kerala Estate Mooriad Chalapuram (1986) 161 ITR 155 (SC) that the amount remitted under a settlement even including interest would not have the character of income being capital receipt. The copy of the said decision is enclosed herewith for your ready reference and records. Since the…

ACIT 4(2)(1), Mumbai vs. Shcil Services Ltd, Mumbai

Accordingly, ground raised by assessee is dismissed

ITA 279/MUM/2017[2012-13]Status: DisposedITAT Mumbai29 Nov 2019AY 2012-13

Bench: Shri S. Rifaur Rahman & Shri Ram Lal Negiacit-4(2)(1) Vs. M/S Shcil Services Ltd. Room No.642, 6Th Floor 12/14 Uti Building Aaykar Bhawan, M.K.Road Bank Street, Cross Line Mumbai-400 020 Near Old Custom House Fort, Mumbai-400 023 Pan/Gir No.Aajcs5661H Appellant) .. Respondent) & M/S Shcil Services Ltd. Vs. Dcit-4(2)(1) C/O Kalyaniwalla&Mistry Llp Room No.669, 6Th Floor Army & Navy Building Aaykar Bhawan, M.K.Road 3Rd Floor, 148, M.G.Road Mumbai-400 020 Mumbai-400 001 Pan/Gir No.Aajcs5661H Appellant) .. Respondent) Assessee By Nitesh Joshi Revenue By T.Kipgen

Section 143(1)Section 143(2)Section 194H

…endent of section 41(1) of the Act, there is nothing in the Act enabling assessment of cessation of a liability as an income. In this regard, attention is invited to the judgment of the Bombay High Court in the case of Mohsin Rehman Penkar vrs CIT reported in 16 ITR 183 In view thereof, it is urged that the AO/CIT(A) were not justified in reducing the written down value by the amount of Rs., 14,46,351/- for the purposes of granting of depreciation. Nor could the said amount be brought to tax under section 41(1) of the Act. 19. With regard to Ground No.3, assessee has submitted as below:- During the year under…

Shcil Service Ltd, Mumbai vs. DCIT 4(2)(1), Mumbai

Accordingly, ground raised by assessee is dismissed

ITA 206/MUM/2017[2012-13]Status: DisposedITAT Mumbai29 Nov 2019AY 2012-13

Bench: Shri S. Rifaur Rahman & Shri Ram Lal Negiacit-4(2)(1) Vs. M/S Shcil Services Ltd. Room No.642, 6Th Floor 12/14 Uti Building Aaykar Bhawan, M.K.Road Bank Street, Cross Line Mumbai-400 020 Near Old Custom House Fort, Mumbai-400 023 Pan/Gir No.Aajcs5661H Appellant) .. Respondent) & M/S Shcil Services Ltd. Vs. Dcit-4(2)(1) C/O Kalyaniwalla&Mistry Llp Room No.669, 6Th Floor Army & Navy Building Aaykar Bhawan, M.K.Road 3Rd Floor, 148, M.G.Road Mumbai-400 020 Mumbai-400 001 Pan/Gir No.Aajcs5661H Appellant) .. Respondent) Assessee By Nitesh Joshi Revenue By T.Kipgen

Section 143(1)Section 143(2)Section 194H

…endent of section 41(1) of the Act, there is nothing in the Act enabling assessment of cessation of a liability as an income. In this regard, attention is invited to the judgment of the Bombay High Court in the case of Mohsin Rehman Penkar vrs CIT reported in 16 ITR 183 In view thereof, it is urged that the AO/CIT(A) were not justified in reducing the written down value by the amount of Rs., 14,46,351/- for the purposes of granting of depreciation. Nor could the said amount be brought to tax under section 41(1) of the Act. 19. With regard to Ground No.3, assessee has submitted as below:- During the year under…

ITO 2(1)(1), Mumbai vs. Tata Motors Ltd, Mumbai

In the result, appeal of the revenue is dismissed

ITA 4822/MUM/2011[2002-03]Status: DisposedITAT Mumbai27 Sept 2017AY 2002-03

Bench: Shri R.C.Sharma, Am & Shri Amarjit Singh, Jm Co No.193/Mum/2012 (Assessment Year :2002-03) Ito 2(1)(1) Vs. M/S. Tata Motors Ltd., R.No.552, Aayakar Bhavan Bombay House, Mumbai 24, Homi Modi Street Fort, Mumbai Pan/Gir No. Aaact2727Q Appellant) .. Respondent)

Section 143(3)Section 147Section 148Section 35DSection 41

…Silk Mills Ltd. (57 taxmann.com 208)(Bom.) 7. CIT v V. S. Dempo & Co. Ltd. (60 taxmann.com 443)(Bom.) 8. Bombay Gas Co. Ltd. v Addl. CIT (23 taxmann.com 22)(IT A T Mumbai) 9. CIT v Chetan Chemicals (P.) Ltd. (267 ITR 770)(Guj.) 10. Mohsin Rehman Penkar v CIT (16 ITR 183)(Bom.) 11. Orient Corporation v CIT (18 ITR 28)(Bom.) 12. Reliance Industries Ltd. v ACIT (2008-TIOL-286)(ITAT Mumbai) 13. Prism Cement Ltd. v JCIT (285 ITR (AT) 43)(ITAT Mumbai) 14. Mindteck (India) Ltd. v ITa (122 ITO 486)(Bom.) 7 CO 193/Mum/2012 M/s. Tata Motors Ltd., 15. SICOM Ltd. v ACIT (ITA Nos.1522 - 1685/M/2009)(ITAT Mumbai) dated 06.12.…

DCIT Cir 3(3), Mumbai vs. Sicom Ltd, Mumbai

In the result, appeal of Revenue is dismissed whereas appeal of the assessee is allowed in part in terms indicated hereinabove

ITA 1685/MUM/2009[2003-2004]Status: DisposedITAT Mumbai06 Dec 2016AY 2003-2004

Bench: Shri R.C.Sharma, Am & Shri Amarjit Singh, Jm M/S. Sicom Ltd., Vs. Dcit – 3(3) – Mumbai-20 Nirmal, 1St Floor, Nariman Point, Mumbai – 400 021 Pan/Gir No. Aaacs5524J Appellant) .. Respondent) & Dcit – 3(3) – Mumbai- Vs. M/S. Sicom Ltd., Nirmal, 1St Floor, Nariman Point, 20 Mumbai – 400 021 Pan/Gir No. Aaacs5524J Appellant) .. Respondent)

Section 115JSection 143(3)Section 234BSection 41

…., consistently held that remission of a debt cannot result in income even if the transaction giving rise to debt had originated in the regular business transactions. The following case laws/precedents support this position :- 1) Mohsin Rehman Penkar v/s CIT (16 ITR 183) (Bom). In this case, there was waiver of loan [including waiver of interest expense component]. Following judgement of House of Lords in the case of British Mexican Petroleum Company's case, the High Court held "it is impossible to see how a mere remission which leads to the discharge of the liability of the debtor can ever become income for the…

Sicom Ltd, Mumbai vs. DCIT RG 3(3), Mumbai

In the result, appeal of Revenue is dismissed whereas appeal of the assessee is allowed in part in terms indicated hereinabove

ITA 1522/MUM/2009[2003-2004]Status: DisposedITAT Mumbai06 Dec 2016AY 2003-2004

Bench: Shri R.C.Sharma, Am & Shri Amarjit Singh, Jm M/S. Sicom Ltd., Vs. Dcit – 3(3) – Mumbai-20 Nirmal, 1St Floor, Nariman Point, Mumbai – 400 021 Pan/Gir No. Aaacs5524J Appellant) .. Respondent) & Dcit – 3(3) – Mumbai- Vs. M/S. Sicom Ltd., Nirmal, 1St Floor, Nariman Point, 20 Mumbai – 400 021 Pan/Gir No. Aaacs5524J Appellant) .. Respondent)

Section 115JSection 143(3)Section 234BSection 41

…., consistently held that remission of a debt cannot result in income even if the transaction giving rise to debt had originated in the regular business transactions. The following case laws/precedents support this position :- 1) Mohsin Rehman Penkar v/s CIT (16 ITR 183) (Bom). In this case, there was waiver of loan [including waiver of interest expense component]. Following judgement of House of Lords in the case of British Mexican Petroleum Company's case, the High Court held "it is impossible to see how a mere remission which leads to the discharge of the liability of the debtor can ever become income for the…

ACIT, New Delhi vs. M/S Dlf Ltd., New Delhi

ITA 3061/DEL/2011[2006-07]Status: DisposedITAT Delhi11 Mar 2016AY 2006-07

Bench: Shri A.T. Varkey & Shri Prashant Maharishi

Section 133ASection 142Section 143(2)Section 144Section 146Section 250

…e High Court observed that Section 10(2A) of the Indian Income Tax Act, 1922, which is the fore-runner of Section 41(1) of the present Act, was introduced w.e.f. 01.4.1955 to get over the judgment of the Bombay High Court in Mohsin Rehman Penkar v. CIT (1948) 16 ITR 183 holding that remission of a liability in a subsequent assessment year in respect of which the assessee had obtained a deduction in an earlier assessment year, can never become income for the purpose of taxation, where the assessee maintains accounts in the mercantile system of accounting. Thus, it may be seen that Section 10(2A) of the Indian Inco…

Dlf Ltd., New Delhi vs. Addl. CIT, New Delhi

ITA 2677/DEL/2011[2006-07]Status: DisposedITAT Delhi11 Mar 2016AY 2006-07

Bench: Shri A.T. Varkey & Shri Prashant Maharishi

Section 133ASection 142Section 143(2)Section 144Section 146Section 250

…e High Court observed that Section 10(2A) of the Indian Income Tax Act, 1922, which is the fore-runner of Section 41(1) of the present Act, was introduced w.e.f. 01.4.1955 to get over the judgment of the Bombay High Court in Mohsin Rehman Penkar v. CIT (1948) 16 ITR 183 holding that remission of a liability in a subsequent assessment year in respect of which the assessee had obtained a deduction in an earlier assessment year, can never become income for the purpose of taxation, where the assessee maintains accounts in the mercantile system of accounting. Thus, it may be seen that Section 10(2A) of the Indian Inco…

The Commissioner of Income Tax-III vs. Shri Vardhman Overseas Ltd

ITA/774/2009HC Delhi23 Dec 2011

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE R.V.EASWAR

Section 260ASection 41(1)Section 68

…ITA No.774/2009 Page 1 of 31 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA NO.774/2009 Reserved on : 24th November, 2011 % Date of Decision : 23rd December, 2011 THE COMMISSIONER OF INCOME TAX-III ……Appellant Through: Mr. Sanjeev Sabharwal, Advocate. VERSUS SHRI VARDHMAN OVERSEAS LTD. …..Respondent Through: None. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTI…

The Commissioner of Income Tax-III vs. Shri Vardhman Overseas Ltd

ITA-774/2009HC Delhi23 Dec 2011
Section 260ASection 41(1)Section 68

…ITA No.774/2009 Page 1 of 31 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA NO.774/2009 Reserved on : 24th November, 2011 % Date of Decision : 23rd December, 2011 THE COMMISSIONER OF INCOME TAX-III ……Appellant Through: Mr. Sanjeev Sabharwal, Advocate. VERSUS SHRI VARDHMAN OVERSEAS LTD. …..Respondent Through: None. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTI…

The Commissioner of Income Tax-III vs. Shri Vardhman Overseas Ltd

ITA - 774 / 2009HC Delhi23 Dec 2011
Section 260ASection 41(1)Section 68

…ITA No.774/2009 Page 1 of 31 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA NO.774/2009 Reserved on : 24th November, 2011 % Date of Decision : 23rd December, 2011 THE COMMISSIONER OF INCOME TAX-III ……Appellant Through: Mr. Sanjeev Sabharwal, Advocate. VERSUS SHRI VARDHMAN OVERSEAS LTD. …..Respondent Through: None. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTI…

Logitronics Pvt Ltd vs. Commissioner of Income Tax & Anr

ITA/1623/2010HC Delhi18 Feb 2011

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

Section 2(24)Section 41(1)

…n of Rs. 57,74,064. In the circumstances, we cannot direct set off of Rs. 27,29,585 against Rs. 57,74,064. It is important to bear in mind that before Section 41(1) came to be enacted, various judgments as reported in Mohsin Rehman Penkar v. CIT (1948) 16 ITR 183 (Bom) and Orient Corporation v. CIT [1950] 18 ITR 28 (Bom) had laid down that remission was not income and in order to get over those judgments Section 41(1) came to be enacted. In the case of CIT v. Phool Chand Jiwan Ram (1981) 131 ITR 37 (Delhi), the Assessee-firm had purchased goods. They had also obtained loans from a party, accounts we…

Mohsin Rehman Penkar v. CIT (16 ITR 183) — Cited in 13 Judgments | BharatTax