Sanjeev Woolen Mills v. CIT

279 ITR 434Supreme Court of India2005#1513 most cited

What is Sanjeev Woolen Mills v. CIT authority for?

The assessee must consistently follow one method of accounting and cannot arbitrarily change it, particularly in contravention of Section 145 of the Income Tax Act. This principle prohibits changes in accounting methods that are not in conformity with the law.

75

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2012 to 2026.

Also referred to as

Sanjeev Woolen Mills v. CIT · method of accounting · consistency principle · Section 145 Income Tax Act · change in accounting method · assessee bound by accounting method · accounting standards Income Tax · 279 ITR 434 · Supreme Court accounting method · Section 145(1) · Section 145(2)

Sections most often in play

Section 143(3)Section 142(1)Section 36(1)(viia)Section 115JBSection 131Section 132Section 132(4)Section 132(4A)
Read the full judgment

Issues it is cited on

depreciation on leased assetssection 23aretention moneysection 145(1)section 36(2)(v)section 41(4)section 211section 115baasection 145(2)section 28(iv)project completion methodsection 36(1)(viia)

Judgments citing Sanjeev Woolen Mills v. CIT

Mrunal Shamsunder Naik, Mumbai vs. ACIT 15(2), Mumbai

ITA 911/MUM/2017[2010-11]Status: DisposedITAT Mumbai08 Nov 2017AY 2010-11

Bench: Sh. R. C. Sharma, Am & Sh. Sandeep Gosain, Jm आयकरअपीलसं./ I.T.A. No. 911/Mum/2017, (निर्धारणवर्ा / Assessment Year: 2010-11)

For Appellant: Shri S. S. Phadkar/For Respondent: Ms Arju Garodia
Section 133(6)

…t was held that only profit embodied on sate proceeds can be taxed. In CIT vs Batachand Ajit Kumar(2003) 263 ITR 610(MP)(HC)(612-613) it was held that suppressed sale cannot be the income only net profit can be assessed. In Sanjeev Woolen Mills Vrs. CIT(2005) 279 ITR 434(sC) it was observed that it is a settled principle of income-tax law that it is the real income which is taxable under the Act. Hon'ble Gujarat High Court in the case of CIT vs. %nit Sheth (2013) 38 Taxmann.com 385 (Guj), has sustained addition to the extent of 12.5% of the bogus purchase. Whereas In Shri Madhukant B. Gandhi vs ITO, ITA No. 1950/…

Sbi Capitalmarkets Ltd vs. DCIT Sp. RG 27

The appeal of the AO stands dismissed

ITA 294/MUM/1999[1994-95]Status: DisposedITAT Mumbai27 Oct 2017AY 1994-95
For Appellant: Shri Nitesh Joshi-ARFor Respondent: Shri BCS Naik-CIT-DR & Saurabh Kumar Rai
Section 254(1)

…d(4 ITR420),the Hon’ble Bombay High Court had dealt with the issue of change in method of accounting.The only condition is that the change should be bonafide and should be followed in subsequent AY.s.The Hon’ble Apex Court in the case of Sanjeev Woolen Mills (279 ITR 434) has held as under: “Choice of the method of accounting lies with the assessee but the assessee would be required to show that he has followed the chosen method regularly. The Department is bound by the assessee’s choice of the method regularly employed unless by this method the true income or profits cannot be arrived at. The assessee’s regular…

ITO, Ward-11(4), Kolkata vs. M/S. Senco Gold Impex Pvt. Ltd., Kolkata

In the result, the appeal of the revenue is treated as partly allowed for statistical purposes

ITA 2194/KOL/2014[2008-2009]Status: DisposedITAT Kolkata25 Oct 2017AY 2008-2009
Section 10ASection 143(3)

…whichever is the lower, and it is now generally accepted as an 9 I.T.A. No. 2194/Kol/2014 Assessment Year: 2008-09 M/s. Senco Gold Impex Pvt. Ltd. established rule of commercial practice and accountancy’. In Sanjeev Woolen Mills v CIT (2005) 149 Taxman 431/279 ITR 434 (SC), the Hon’ble Court held that ‘permissibility of valuation of stock at market value would be only if market value of stock is lower than cost of stock; where market value of stock had been taken into consideration while arriving at chargeable income although market value of stock was more than the cost value of stock, rejection of accounts ma…

Manish D. Mandhania, Mumbai vs. Asst CIT 33(2), Mumbai

In the result, this appeal filed by the assessee stands dismissed

ITA 1211/MUM/2017[2009-10]Status: DisposedITAT Mumbai03 Oct 2017AY 2009-10

Bench: Shri Shamim Yahya, Am & Shri Shaktijit Dey, Jm

For Appellant: --- None ---For Respondent: Shri Purshottam Kumar
Section 147Section 148Section 69C

…4 (Guj) (HC) 4. ITO vs Permanand (2007) 107 TTJ 395 0d) (Trib.) 5. Shri Madhukant B. Gandhi vs ITO ITA No. 1950/M/2009 Bench 'B' dt. 23-02-2010 (AY 2005-06) (Mum.) (Trib.) 5 ITA No.1211/Mum/2017. Shri Manish D.Mandhania. 6. Sanjeev Woolen Mills vs CIT (2005) 279 ITR 434 (SC) In view of the above discussion, it is seen that the addition made by the AO on account of alleged bogus purchase cannot be sustained fully in appeal. Having regard to facts of the case and submissions made, it is seen the addition made by the AO out of the alleged bogus purchases of Rs.13,16,805/- comes to Rs.1,64,600/-, which is found to b…

Hans Chemicals P.Ltd, Mumbai vs. ITO 9(2)(1), Mumbai

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

ITA 3316/MUM/2017[2011-12]Status: DisposedITAT Mumbai18 Sept 2017AY 2011-12

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm M/S. Hans Chemicals Pvt. Ltd., Vs. Ito 9(2)(1) 407, Panchsheel 2A Raheja Aayakar Bhavan Township L.S. Rajeka Cross Road Mumbai – 400 020 No.3, Malad (E), Mumbai – 400 097 Pan/Gir No. Aabch5433N Appellant) .. Respondent) Ito 12(2)(3) Vs. M/S. Hans Chemicals Pvt. Ltd., Aayakar Bhavan 407, Panchsheel 2A Raheja Mumbai – 400 020 Township L.S. Rajeka Cross Road No.3, Malad (E), Mumbai – 400 097 Pan/Gir No. Aabch5433N Appellant) .. Respondent) Assessee By Shri Neel Khandelwal Revenue By Shri V. Justin

Section 143(3)Section 69C

…s. Sanjay Oil Cake Industries (2009) 316 ITR 274 (Guj) (HC) 4. ITO vs. Permanand (2007) 107 TTJ 395 (Jd)(Trib.) 5. Shri Madhukant B. Gandhi vs. ITO ITA No. 1950/M/2009 Bench 'B' dt. 23-02-2010 (AY 2005-06) (Mum.)(Trib.) 5. Sanjeev Woolen Millls Vs. CIT (2005) 279 ITR 434 (SC) 6.6 In view of the above discussion, it is seen that the addition made by the AO on account of alleged bogus purchase cannot be sustained fully in appeal. Having regard to facts of the case and submissions made, it would be fair and reasonable if the addition made by the A.O. is restricted to 5% on the alleged M/s. Hans Chemicals Pvt. Ltd.,…

Rajendra Chandulal Shah, Mumbai vs. ITO 33(3)(1), Mumbai

In the result, this appeal filed by the assessee stands dismissed

ITA 2937/MUM/2017[2009-10]Status: DisposedITAT Mumbai07 Sept 2017AY 2009-10

Bench: Shri Shamim Yahya

For Appellant: Shri V.H.JariwalaFor Respondent: Shri V.Janardhanan
Section 147Section 148

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ ‘SMC’, मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “SMC”, MUMBAI Before Shri Shamim Yahya, Accountant Member ITA No.2937/Mum/2017 : Asst.Year 2009-2010 Shri Rajendra Chandulal Shah Income Tax Officer बनाम/ 101 Raj Vaibhav II, Mahavir Nagar Ward 33(3)(1) Dahanukar Wadi, Kandivali (West) Mumbai Vs. Mumbai – 400 067. PAN : AAJPS4317F. (अपीलाथ" /Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से /Appellant by : Shri V.H.Jariwala ""यथ" क" ओर से /Respondent by : Shri V.Janardhanan सुनवाई क" तार"ख / घोषणा क" तार"ख / Date of Hearing : 03.07.2017 Date of Pronouncement : 07.09.…

Hans Chemicals P.Ltd, Mumbai vs. ITO 12(2)(3), Mumbai

In the result, this appeal by the assessee stands dismissed

ITA 1193/MUM/2017[2009-10]Status: DisposedITAT Mumbai03 Jul 2017AY 2009-10

Bench: Shri Shamim Yahya

For Appellant: Ms.Natasha (LA not filed)For Respondent: Shri B.Satyanarayana Raju (Sr.DR)

…) 3. CIT vs. Sanjay Oil Cake Industries (2009) 316 ITR 274 (Guj) 4. ITO vs. Permanand (2007) 107 TTJ 395 (Jd)(Trib.) 5. Madhukant B. Gandhi vs. ITO ITA No. 1950/M/2009 Bench 1B' dt. 23-02-2010 (AY 2005-06) (Mum.)(Trib,) 6. Sanjeev Woolen Millls Vs. CIT (2005) 279 ITR 434 (SC) 6. Sanjeev Woolen Mills v. CIT (2005) 279 ITR 434 (SC) In view of the above discussion it is seen that the addition made by the A.O. on account of alleged bogus purchase cannot be sustained fully in appeal. Having regards to facts of the case it would be fair and reasonable if the addition made is restricted to G.P. addition of 10% on the al…

I.T.O WD - 1(4), Kolkata vs. M/S Command Constructions Private Limited, Kolkata

In the result, the appeal by the Revenue is dismissed

ITA 2271/KOL/2013[2008-09]Status: DisposedITAT Kolkata15 Mar 2017AY 2008-09

Bench: Hon’Ble Sri Aby.T.Varkey, Jm & Dr.Arjun Lal Saini, Am] I.T.A No. 2271/Kol/2013 Assessment Year : 2008-09 I.T.O., Ward-1(4) -Vs.- M/S. Command Constructions Pvt. Ltd. Laha Paint House, 3Rd Floor, Kolkata P-7,Chowringhee Square, 7, Chittaranjan Avenue, Kolkata-700069 Kolkata-700072 [Pan : Aaccc5075A] (Appellant) (Respondent)

For Appellant: Shri G.Mallikarjuna CIT-DRFor Respondent: Shri J.P.Khaitan, Sr.Advocate
Section 143(1)Section 147Section 148

…ed on the order of AO. The ld. Counsel for the assessee relied on the submissions as were made before CIT(A) and relied on the order of CIT(A). He further placed reliance on the decision of the Hon’ble Supreme Court in the case of Sanjeev Wollen Mills Vs. CIT 279 ITR 434 (SC) wherein the Hon’ble Supreme Court held that by showing Market value of closing stock, assessee cannot be said to have made profit which was necessary for taxing income under the Act. 26. We have given a very careful consideration to the rival submissions. As far as the validity of initiation of reassessment proceedings u/s.147 of the Act is…

I.T.O WD - 1(4), Kolkata vs. M/S Wellgrowth Griha Nirman Private Limited

In the result, the appeal by the Revenue is dismissed

ITA 2260/KOL/2013[2008-09]Status: DisposedITAT Kolkata15 Mar 2017AY 2008-09

Bench: Hon’Ble Sri Aby.T.Varkey, Jm & Dr.Arjun Lal Saini, Am] I.T.A No. 2260/Kol/2013 Assessment Year : 2008-09 I.T.O., Ward-1(4) -Vs.- M/S. Wellgrowth Griha Nirman Pvt. Ltd. Laha Paint House, 3Rd Floor, Kolkata P-7, Chowringhee Square, 7, Chittaranjan Avenue, Kolkata-700069 Kolkata-700072 [Pan : Aaacw5157D] (Appellant) (Respondent)

For Appellant: Shri G.Mallikarjuna CIT-DRFor Respondent: Shri J.P.Khaitan, Sr.Advocate
Section 143(1)Section 147Section 148

…ed on the order of AO. The ld. Counsel for the assessee relied on the submissions as were made before CIT(A) and relied on the order of CIT(A). He further placed reliance on the decision of the Hon’ble Supreme Court in the case of Sanjeev Wollen Mills Vs. CIT 279 ITR 434 (SC) wherein the Hon’ble Supreme Court held that by showing Market value of closing stock, assessee cannot be said to have made profit which was necessary for taxing income under the Act. 26. We have given a very careful consideration to the rival submissions. As far as the validity of initiation of reassessment proceedings u/s.147 of the Act is…

I.T.O.WD-1(4), Kolkata vs. M/S Blue Heaven Griha Nirman Pvt. Ltd., Kolkata

In the result, the appeal by the Revenue is dismissed

ITA 2270/KOL/2013[2008-09]Status: DisposedITAT Kolkata16 Nov 2016AY 2008-09

Bench: Shri P. M. Jagtap, Am & Shri K. Narasimha Chary, Jm] I.T.A No. 2270/Kol/2013 Assessment Year: 2008-09 Income-Tax Officer, Wd-1(4), Kolkata. Vs. Blue Heaven Griha Nirman Pvt. Ltd. (Pan: Aaccb3287F) (Appellant) (Respondent)

For Appellant: Shri Niraj Kumar, CIT, DRFor Respondent: Shri S. Jhajharia, CA & Shri Sujoy Sen, Advocate
Section 143(1)Section 143(3)Section 147

…tax had escaped assessment and the AO acted without jurisdiction by issuing notice under section 148 for making an assessment under section 147 in the partner's case. Hence, these grounds of the appellant are allowed." In Sanjeev Woolen Mills v. CIT, (2005) 279 ITR 434 (at pages 447-8) the Hon'ble 8. Supreme Court held that,- " In the present case, the method adopted by the assessee is to value the closing stock at the market value irrespective of the fact whether the market value of the stock at the relevant time is more than the cost value of the stock, which necessarily results in imaginary or notional prof…

I.T.O WD - 1(4), Kolkata vs. M/S Orchid Griha Nirman, Kolkata

In the result, the appeal by the Revenue is dismissed

ITA 2269/KOL/2013[2008-09]Status: DisposedITAT Kolkata19 Oct 2016AY 2008-09

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Dr.Arjun Lal Saini, Am] I.T.A No. 2269/Kol/2013 Assessment Year : 2008-09 I.T.O., Ward-1(4) -Vs.- M/S. Orchid Griha Nirman Pvt. Ltd. Kolkata Kolkata [Pan : Aaaco 7148 L] (Respondent) (Appellant) For The Appellant : Shri Angam Shaiza, Cit For The Respondent : (I) Shri J.P.Khaitan, Sr.Advocate (Ii)Shri S.Jhajharia, Fca (Iii) Shri Sujoy Sen, Advocate

For Appellant: Shri Angam Shaiza, CITFor Respondent: (i) Shri J.P.Khaitan, Sr.Advocate
Section 143(1)Section 147Section 148

…tinues to hold is not a taxable event and does not give rise to any taxable income. A person cannot make a profit from himself. Reliance was placed on the following passage from the judgment of the Hon'ble Supreme Court in Sanjeev Wool en Mills v. CIT, (2005) 279 ITR 434 (at pages 447-8) which takes note of the relevant previous decisions:- " In the present case, the method adopted by the assessee is to value the closing stock at the market value irrespective of the fact whether the market value of the stock at the relevant time is more than the cost value of the stock, which necessarily results in imaginary or n…

Inventurus Knowledge Services P.Ltd, Navi Mumbai vs. ITO 5(2)(1), Mumbai

In the result appeal of the assessee company is partly allowed

ITA 5922/MUM/2013[2009-10]Status: DisposedITAT Mumbai21 Oct 2015AY 2009-10

Bench: Shri Joginder Singh & Shri Ramit Kocharassessment Year: - 2009-10 Inventurus Knowledge Services V. Income Tax Officer Pvt. Ltd. 5(2)(1), C/O. Seren Properties Pvt. Ltd. 525, Aaykar Bhavan, (Sez), Unit No. 204, Build No. 5, M.K. Road, Mindspace Airoli Camp, Plot No. Mumbai - 400 020. 3, Gat No. 95, Kalwa Trans, Thane Creek, Midc Industrial Area, Thane Belapur Road, Airoli, Navi Mumbai – 400 708. Pan/Gir No. Aabck4601P

…irming the disallowance of loss in eligible derivate transactions in foreign exchange of Rs.l,09,98,560/- holding them as notional and contingent losses relying on following decisions which are distinguishable on facts :- (i) M/s Sanjiv Woolen Mills V/s. CIT 279 ITR 434 (SC) (ii) CIT Vs. Oriental Motor Car Co. P. Ltd. (1980) 124 ITR 74 And not following the following recent decisions of Honourable Supreme Court and ITAT on similar facts which fully support the contentions of appellant on this issue. (i) CIT V/s. Woodward Governor India Pvt. Ltd. 312 ITR 254 (SC) (ii) Shree Capital Services Vs. ACIT 318 ITRI (I…

Commissioner of Income Tax vs. Superior Crafts

The appeals are dismissed holding that no substantial question of law arises for

ITA/244/2009HC Delhi06 Mar 2012
Section 142Section 260A

…ficer is a question of fact, namely, whether the income, profits and gains can or cannot be properly deduced from the method of accounting regularly adopted by the assessee.” 35. Recently in Sanjeev Woolen Mills Vs. Commissioner of Income-Tax [2005] 279 ITR 434 (SC), it was observed by the Supreme Court that the true trading result of business for an accounting period cannot be ascertained without taking into account the stock-in-trade at the end of the accounting period. It was held that valuation of closing stock cannot be dispensed 2012:DHC:1630-DB ITA Nos. 244/2009, 547/2011, 548/2011 & 615/2…

Commissioner of Income Tax Del vs. Indian Sugar & Gen.Indu.Ex.Imp

ITA - 645 / 2005HC Delhi30 Jan 2012
Section 260A

…CIT 250 ITR 871 (SC) were 2012:DHC:658-DB ITA Nos. 645/2005, 742/2005, 796/2005, 817/2005, 794/2005, 71/2011, 1166/2011 & 1168/2011. Page 17 of 23 considered by the Supreme Court in the case of Sanjeev Woolen Mills v. CIT Mumbai (2005) 279 ITR 434 (SC) and it has been observed that closing stock can be valued on cost price or at market price, if the market price is less than the cost. However, the said principle does not apply if the market value of the closing stock is more than the cost, as profits cannot be brought to tax on notional basis. In view of the aforesaid legal position…

Commissioner of Income Tax Del

ITA/645/2005HC Delhi30 Jan 2012
Section 260A

…CIT 250 ITR 871 (SC) were 2012:DHC:658-DB ITA Nos. 645/2005, 742/2005, 796/2005, 817/2005, 794/2005, 71/2011, 1166/2011 & 1168/2011. Page 17 of 23 considered by the Supreme Court in the case of Sanjeev Woolen Mills v. CIT Mumbai (2005) 279 ITR 434 (SC) and it has been observed that closing stock can be valued on cost price or at market price, if the market price is less than the cost. However, the said principle does not apply if the market value of the closing stock is more than the cost, as profits cannot be brought to tax on notional basis. In view of the aforesaid legal position…