Sutlej Cotton Mills Ltd. v. CIT

116 ITR 1Supreme Court of India1979#177 most cited

What is Sutlej Cotton Mills Ltd. v. CIT authority for?

A gain arising from the cancellation of a forward exchange contract entered into for the acquisition of a capital asset constitutes a capital receipt. Income-tax liability for such transactions is determined by the specific provisions of the Income Tax Act, independent of the accounting treatment in the books of account.

409

judgments rely on this decision, according to BharatTax’s citation analysis of 367,181 Indian tax judgments — from 2007 to 2026.

Also referred to as

Sutlej Cotton Mills Ltd · 116 ITR 1 · capital receipt · foreign exchange gain · forward contract · capital asset · Section 43A · income tax liability · accounting treatment · capital gains

Sections most often in play

Section 14ASection 37(1)Section 115JBSection 143(3)Section 32Section 143(2)Section 142(1)Section 250
Read the full judgment

Issues it is cited on

section 43aeligible businessbook profitssection 115jsection 115jbrevenue expendituresection 80iamercantile system of accountingamalgamationsection 37(1)section 80isection 43

Judgments citing Sutlej Cotton Mills Ltd. v. CIT

Jindal Steel & Power Ltd., Haryana vs. DCIT, Hisar

In the result, the appeal filed by the Revenue for the Assessment Year 2008-09 is dismissed

ITA 413/DEL/2010[2006-07]Status: DisposedITAT Delhi01 Dec 2021AY 2006-07

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar(Through Video Conferencing)

For Appellant: Shri Salil Kapoor, AdvocateFor Respondent: Date of Hearing
Section 115JSection 143(3)Section 234BSection 80H

…he Act is governed by provisions of the Act and is not dependent on the treatment followed for the same in the books of accounts. 92 ITA. No. 167/Del/2009 & 7 ors. Reliance in this regard was placed on following decisions: • Sutlej Cotton Mills Ltd. v. CIT: 116 ITR 1 (SC) • Kedarnath Jute Mfg. Co. Ltd. v. CIT: 82 ITR 363 (SC) • AS-19 on accounting for leases classifies lease transactions for accounting purposes as under: (i) Finance Lease (ii) Operating Lease Finance Lease, in AS-19, is described as a lease that transfers substantially all the risks and rewards in respect of ownership of an asset; title may or…

DCIT, Hisar vs. Jindal Steel & Power Ltd., Hisar

In the result, the appeal filed by the Revenue for the Assessment Year 2008-09 is dismissed

ITA 341/DEL/2010[2006-07]Status: DisposedITAT Delhi01 Dec 2021AY 2006-07

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar(Through Video Conferencing)

For Appellant: Shri Salil Kapoor, AdvocateFor Respondent: Date of Hearing
Section 115JSection 143(3)Section 234BSection 80H

…he Act is governed by provisions of the Act and is not dependent on the treatment followed for the same in the books of accounts. 92 ITA. No. 167/Del/2009 & 7 ors. Reliance in this regard was placed on following decisions: • Sutlej Cotton Mills Ltd. v. CIT: 116 ITR 1 (SC) • Kedarnath Jute Mfg. Co. Ltd. v. CIT: 82 ITR 363 (SC) • AS-19 on accounting for leases classifies lease transactions for accounting purposes as under: (i) Finance Lease (ii) Operating Lease Finance Lease, in AS-19, is described as a lease that transfers substantially all the risks and rewards in respect of ownership of an asset; title may or…

ACIT, Hisar vs. M/S Jindal Steel & Power Ltd., Hisar

In the result, the appeal filed by the Revenue for the Assessment Year 2008-09 is dismissed

ITA 220/DEL/2009[2003-04]Status: DisposedITAT Delhi01 Dec 2021AY 2003-04

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar(Through Video Conferencing)

For Appellant: Shri Salil Kapoor, AdvocateFor Respondent: Date of Hearing
Section 115JSection 143(3)Section 234BSection 80H

…he Act is governed by provisions of the Act and is not dependent on the treatment followed for the same in the books of accounts. 92 ITA. No. 167/Del/2009 & 7 ors. Reliance in this regard was placed on following decisions: • Sutlej Cotton Mills Ltd. v. CIT: 116 ITR 1 (SC) • Kedarnath Jute Mfg. Co. Ltd. v. CIT: 82 ITR 363 (SC) • AS-19 on accounting for leases classifies lease transactions for accounting purposes as under: (i) Finance Lease (ii) Operating Lease Finance Lease, in AS-19, is described as a lease that transfers substantially all the risks and rewards in respect of ownership of an asset; title may or…

Jindal Steel & Power Limited vs. Addl. CIT

In the result, the appeal filed by the Revenue for the Assessment Year 2008-09 is dismissed

ITA 167/DEL/2009[2003-04]Status: DisposedITAT Delhi01 Dec 2021AY 2003-04

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar(Through Video Conferencing)

For Appellant: Shri Salil Kapoor, AdvocateFor Respondent: Date of Hearing
Section 115JSection 143(3)Section 234BSection 80H

…he Act is governed by provisions of the Act and is not dependent on the treatment followed for the same in the books of accounts. 92 ITA. No. 167/Del/2009 & 7 ors. Reliance in this regard was placed on following decisions: • Sutlej Cotton Mills Ltd. v. CIT: 116 ITR 1 (SC) • Kedarnath Jute Mfg. Co. Ltd. v. CIT: 82 ITR 363 (SC) • AS-19 on accounting for leases classifies lease transactions for accounting purposes as under: (i) Finance Lease (ii) Operating Lease Finance Lease, in AS-19, is described as a lease that transfers substantially all the risks and rewards in respect of ownership of an asset; title may or…

DCIT, New Delhi vs. M/S. Ambreen Projects & Infrastrcture (P) Ltd., New Delhi

In the result, the appeal of the Revenue is allowed

ITA 4037/DEL/2013[2009-10]Status: DisposedITAT Delhi24 Nov 2021AY 2009-10

Bench: Shri O.P. Kant & Shri Kuldip Singh[Through Video Conferencing] Assessment Year: 2009-10

Section 132Section 132(4)Section 139(1)Section 143(3)Section 153CSection 69B

…ufacturing Company Ltd Vs CIT (1971) 82 ITR 363 (SC) has laid down that accounting entries in the books are not decisive of the character of a receipt or outgoing. The observations of the Hon’ble Apex Court in the case of Sutlej cotton Mills Ltd Vs CIT (1979) 116 ITR 1 (SC) are also to this effect. 7.9 The investment is the exclusive property of the assessee; the assessee is entitled to enjoy all the fruits of the investment. There is no legal or contractual liability binding the assessee to share either the property or its fruits. The amount actually expanded in making such investment exceeds the amount recorde…

JCIT, Bangalore vs. M/S Biocon Ltd., Bangalore

In the result appeal filed by assessee for assessment year

ITA 558/BANG/2016[2011-12]Status: DisposedITAT Bangalore12 Nov 2021AY 2011-12

Bench: Shri B.R. Baskaran & Smt Beena Pillai

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Muzaffar Hussain, CIT (DR)
Section 143(3)Section 144CSection 144C(5)Section 92C

…submitted that as per Accounting Standard 11 assessee was required to reinstate the loan amount on the closing date of the balance sheet. He placed reliance on the decision of Hon’ble Supreme Court in case of Sutlej cotton Mills Ltd. vs CIT reported in (1979) 116 ITR 1 wherein Hon’ble Supreme Court is observed as under: Page 23 of 51 IT(TP)A No. 230/Bang/2014, IT(TP)A Nos. 557 & 558/Bang/2016 & C.O. No. 20/Bang/2017 “Whether the loss suffered by the assessee was a trading loss or not would depend on the answer to the question, whether the loss was in respect of a trading asset or a capital asset. In the former c…

Biocon Limited, Bangalore vs. JCIT, Bangalore

In the result appeal filed by assessee for assessment year

ITA 557/BANG/2016[2011-12]Status: DisposedITAT Bangalore12 Nov 2021AY 2011-12

Bench: Shri B.R. Baskaran & Smt Beena Pillai

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Muzaffar Hussain, CIT (DR)
Section 143(3)Section 144CSection 144C(5)Section 92C

…submitted that as per Accounting Standard 11 assessee was required to reinstate the loan amount on the closing date of the balance sheet. He placed reliance on the decision of Hon’ble Supreme Court in case of Sutlej cotton Mills Ltd. vs CIT reported in (1979) 116 ITR 1 wherein Hon’ble Supreme Court is observed as under: Page 23 of 51 IT(TP)A No. 230/Bang/2014, IT(TP)A Nos. 557 & 558/Bang/2016 & C.O. No. 20/Bang/2017 “Whether the loss suffered by the assessee was a trading loss or not would depend on the answer to the question, whether the loss was in respect of a trading asset or a capital asset. In the former c…

M/S Centum Rakon India Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore

In the result, the appeal filed by the assessee stands allowed

ITA 1964/BANG/2017[2009-10]Status: DisposedITAT Bangalore01 Nov 2021AY 2009-10

Bench: Shri Chandra Poojari & Smt Beena Pillaiita. No. 1964/Bang/2017 Assessment Year: 2009-10 M/S. Rakon India Pvt. The Deputy Ltd., Commissioner Of #12, Khb Industrial Area, Income Tax, Yelahanka New Town, Circle 2(1)(1), Bangalore – 560 106. Vs. Bangalore. Pan: Aadcc2533L (Appellant) (Respondent) Appellant By : Shri Sandeep Chalapathy, Ca Shri Kannan Narayanan, Jcit Respondent By : (Dr) Date Of Hearing : 17.08.2021 Date Of Pronouncement : 01.11.2021 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Order Dated 14/07/2017 Passed By The Ld.Cit(A), Bangalore-2 For Assessment Year 2009-10 On Following Grounds Of Appeal: “1. That The Order Of The Learned Commissioner Of Income Tax (Appeals) In So Far It Is Prejudicial To The Interests Of The Appellant Is Bad & Erroneous In Law & Against The Facts & Circumstances Of The Case. 2. That The Learned Commissioner Of Income Tax (Appeals) Erred In Law & On Facts In Determining The Alp Of International Transaction At Rs. 32,77,99,833 /- 3. Comparables: 3.1. That The Learned Commissioner Of Income Tax (Appeals) Erred In Law & On Facts In Choosing M/S. Valiant Communication Ltd As A Comparable Entity Ignoring The Fact That M/S. Valiant Communication

For Appellant: Shri Sandeep Chalapathy, CAFor Respondent: (DR)

…any gain or loss arising out of change in foreign currency rate in respect of transaction for import or export of goods is nothing, but inherent part of the price of import or the value of export. The Hon'ble Supreme Court in Sutlej Cotton Mills Ltd. VS. CIT 116 ITR 1 (SC) has held that : 'where profit or loss arises to an asssessee on account of appreciation or depreciation ITA Nos.4446 & 4447/Del/2007 in the value of foreign currency held by it, on conversion into another currency, such profit or loss would ordinarily be trading profit or loss if the foreign currency is held by the assessee on revenue account…

M/S Glaxo Smithkline Asia Pvt. Ltd., Nabha vs. DCIT, C-4(1), Chandigarh

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 1495/CHANDI/2019[2015-16]Status: DisposedITAT Chandigarh26 Oct 2021AY 2015-16

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

M/S Glaxo Smithkline Asia Pvt. Ltd., Gurgaon vs. ACIT, C-4(1), Chandigarh

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 47/CHANDI/2018[2013-14]Status: DisposedITAT Chandigarh26 Oct 2021AY 2013-14

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

M/S Glaxo Smithkline Asia Pvt. Ltd., Gurgaon vs. ACIT, C-4(1), Chandigarh

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 1500/CHANDI/2018[2014-15]Status: DisposedITAT Chandigarh26 Oct 2021AY 2014-15

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

M/S Glaxosmithkline Asia Pvt. Ltd., Gurgaon vs. ACIT, Chandigarh

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 242/CHANDI/2017[2007-08]Status: DisposedITAT Chandigarh26 Oct 2021AY 2007-08

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

Glaxosmithkline Asia Pvt. Ltd., Gurgaon vs. DCIT, Chandigarh

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 228/CHANDI/2017[2011-12]Status: DisposedITAT Chandigarh26 Oct 2021AY 2011-12

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

Glaxosmithkline Asia Pvt. Ltd., Gurgaon vs. DCIT, Chandigarh

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 227/CHANDI/2017[2010-11]Status: DisposedITAT Chandigarh26 Oct 2021AY 2010-11

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

Glaxosmithkline Asia Pvt. Ltd., Gurgaon vs. ACIT, Chandigarh

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 226/CHANDI/2017[2009-10]Status: DisposedITAT Chandigarh26 Oct 2021AY 2009-10

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

Glaxosmithkline Asia Pvt. Ltd., Gurgaon vs. ACIT, Chandigarh

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 225/CHANDI/2017[2008-09]Status: DisposedITAT Chandigarh26 Oct 2021AY 2008-09

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

ACIT, Chandigarh vs. M/S Glaxo Smithkline Asia Pvt. Ltd., Gurgaon

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 222/CHANDI/2017[2009-10]Status: DisposedITAT Chandigarh26 Oct 2021AY 2009-10

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

ACIT, Chandigarh vs. M/S Glaxo Smithkline Asia Pvt. Ltd., Gurgaon

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 221/CHANDI/2017[2009-10]Status: DisposedITAT Chandigarh26 Oct 2021AY 2009-10

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

ACIT, Chandigarh vs. M/S Glaxo Smithkline Asia Pvt. Ltd., Gurgaon

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 220/CHANDI/2017[2008-09]Status: DisposedITAT Chandigarh26 Oct 2021AY 2008-09

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…

ACIT, Chandigarh vs. M/S Glaxo Smithkline Asia Pvt. Ltd., Gurgaon

In the result, all the appeals of the assessee and the Revenue, stand partly allowed for statistical purposes

ITA 219/CHANDI/2017[2007-08]Status: DisposedITAT Chandigarh26 Oct 2021AY 2007-08

…n that the way in which entries are made by the appellant in its books of account is not determinative of the question whether the appellant had earned any profit or suffered any loss as held by the hon'ble apex court in Sutlej Cotton Mills Ltd. v. CIT (1979) 116 ITR 1 (SC). It was further held by the hon'ble apex court that what is necessary to be considered is the true nature of transaction and whether in fact it has resulted in profit or loss to the appellant. Further, the said deduction was claimed during the year under consideration and the claim being bona fide is to be allowed in the year in which the same…