United Commercial Bank v. CIT

240 ITR 355Supreme Court of India1999#245 most cited

What is United Commercial Bank v. CIT authority for?

Liabilities accrued on a notional basis are allowable as deductions under the mercantile system of accounting even if their exact quantification or discharge is deferred to a future date or if the demand itself is disputed.

314

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2009 to 2026.

Also referred to as

United Commercial Bank v. CIT · Section 145 · Section 37(1) · mercantile system of accounting · accrual basis deduction · unascertained liability · provision for expenses · deferred quantification · disputed liability · business deductions

Also reported as

156 CTR 380

Sections most often in play

Section 143(3)Section 37(1)Section 36(1)(viia)Section 14ASection 36(1)(vii)Section 145Section 36(1)(viii)Section 10(34)

Issues it is cited on

section 36(2)(v)section 145(1)section 36(1)(viia)section 36(2)section 36(1)(vii)interest on securitiesmercantile system of accountingsection 10(34)profits and gains of business or professionsection 145section 36(1)disallowance u/s 14a

Judgments citing United Commercial Bank v. CIT

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

…ontracts was booked in the profit and loss account as per the mandatory requirements of RBI guidelines. The assessee relied on the decision Page 22 of 44 23 Assessment year: - 2009-10 of the Hon'ble Supreme Court in the case of United Commercial bank v CIT,240 ITR 355 and also on following decisions:- 1. Bank of Tokyo v Inspecting Assistant Commissioner, 13 ITD 32 2. State bank of Mysore v CIT, 114 ITR 704 (Kerala) 3. CIT v. Canara Bank, 63 ITR 328 (sc) 4. ONGC v DCIT, 83 ITD 151 (Delhi) Ld Commissioner (Appeals) allowed the assessee's appeal, inter alia, observing that the assessee was offering profits result…

Assistant Commissioner of Income Tax, Tumkur vs. M/S Tumkur Veerashiva Co.Operative Bank Ltd, Tumkur

In the result, the Revenue appeal is partly allowed for statistical purpose

ITA 1174/BANG/2014[2010-11]Status: DisposedITAT Bangalore16 Oct 2015AY 2010-11

Bench: Shri Vijaypal Rao & Shri G Manjunathathe Asst. Commissioner Of Income-Tax, Circle-1, Tumkur. . Appellant Vs. M/S Tumkur Veerashiva Co-Operative Bank Ltd., Dr. Radhkrishna Road, Ss Puram, Tumkur. . Respondent Appellant By : Shri Pk Srihari, Addl. Cit, Respondent By : Shri None Date Of Hearing : 08-10-2015 Date Of Pronouncement : 16-10-2015 O R D E R

For Appellant: Shri PK Srihari, Addl. CITFor Respondent: Shri None
Section 142(1)Section 143(2)Section 143(3)Section 37

…system, there is no justification in interfering with the order of ITA No.1174/B/14 12 the Commissioner of Income-tax (Appeals) on this issue of amortization of premium on government securities. United Commercial Bank v. CIT (1999) 156 CTR (SC) 380 ; (1999) 240 ITR 355 (SC) and South Indian Bank Ltd., (ITA No.126/Coch/2004, dated.___ Sept, 2005 Followed”. (ii) The Khanapur Co-op Bank Ltd v. ITO – ITANo.141/PNJ/2011, dated.8.9.2011 : The Hon'ble Bench of Panaji Tribunal had recorded its findings that "6. Likewise, the premium amortized atRs.1,78,098/- is claimed to be in respect of securities held under the ca…

ACIT, Hubli vs. The Sirsi Urban Sahakari Bank Ltd., Sirsi

In the result, Revenue’s appeal for Assessment Year 2010-11 is treated as partly allowed for statistical purposes

ITA 626/BANG/2014[2010-11]Status: DisposedITAT Bangalore08 Apr 2015AY 2010-11

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Dr. P.K. Srihari, Addl. CIT (D.R)For Respondent: Shri S. Ramasubramanian, C.A
Section 143(3)Section 14ASection 36(1)(vii)Section 40

…method of accounting system, there is no justification in interfering with the order of the Commissioner of Income-tax (Appeals) on this issue of amortization of premium on government securities. United Commercial Bank v. CIT (1999) 156 CTR (SC) 380 ; (1999) 240 ITR 355 (SC) and South Indian Bank Ltd., (ITA No.126/Coch/2004, dated.___ Sept, 2005 followed." (ii) The Khanapur Co-op Bank Ltd v. ITO – ITA No.141/PNJ/2011, dated.8.9.2011 : The Hon'ble Bench of Panaji Tribunal had recorded its findings that "6. Likewise, the premium amortized at Rs.1,78,098/- is claimed to be in respect of securities held under the ca…

ACIT, Mangalore vs. M/S Corporation Bank, Mangalore

In the result, appeal of the revenue stands dismissed

ITA 1264/BANG/2013[2011-12]Status: DisposedITAT Bangalore11 Mar 2015AY 2011-12

Bench: Shri Rajpal Yadav & Shri Abraham P George

For Appellant: Shri S. Ananthan, CAFor Respondent: Dr. P.K.Srihari, Addl.CIT
Section 36(1)Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viiia)

…e action of the AO in disallowing loss claimed on treating investments as stock-in-trade by drawing the investment trading account of Rs.775,96,55,047. The Tribunal held “16. We have heard both sides and find that the Supreme Court in the case of UCO Bank in 240 ITR 355 has held as under : "In our view, as stated above, consistently for 30 years, the assessee was valuing the stock-in-trade at cost for the purpose of statutory balance-sheet, and for the income- tax return, valuation was at cost or market value,whichever was lower. That practice was accepted by the Department and there was no justifiable reason f…

Vijaya Bank, Bangalore vs. Addl.C.I.T., Bangalore

In the result the appeal by the Assessee is allowed

ITA 653/BANG/2012[2008-09]Status: DisposedITAT Bangalore27 Feb 2015AY 2008-09

Bench: Shri N.V. Vasudevan & Shri Jason P. Boazassessment Year : 2008-09

For Appellant: Shri S.Ananthan and Smt.Lalitha Rameswaran, CAsFor Respondent: Shri O.P.Yadav, CIT-III (DR)
Section 36(1)(viia)

…t Master Circular issued by the RBI had to be followed. Accordingly, the loss on diminution value of investments was disallowed by the AO. 30. On appeal by the assessee; the CIT (A), following the decision of the Hon'ble Supreme Court in the case of UCO Bank 240 ITR 355(SC) and decision of ITAT in Assessee’s own case in AY 03-04 in ITA ITA Nos. 578 & 653/Bang/2012 Page 29 of 49 No.253/Bang/2007 dated 24.1.2008, deleted the disallowance made by the Assessing Officer. Aggrieved by the order of the CIT (A), Revenue has preferred the present appeal before the Tribunal. 31. The learned DR relied on the order of…

JCIT, Bangalore vs. M/S Vijaya Bank, Bangalore

In the result the appeal by the Assessee is allowed

ITA 578/BANG/2012[2008-09]Status: DisposedITAT Bangalore27 Feb 2015AY 2008-09

Bench: Shri N.V. Vasudevan & Shri Jason P. Boazassessment Year : 2008-09

For Appellant: Shri S.Ananthan and Smt.Lalitha Rameswaran, CAsFor Respondent: Shri O.P.Yadav, CIT-III (DR)
Section 36(1)(viia)

…t Master Circular issued by the RBI had to be followed. Accordingly, the loss on diminution value of investments was disallowed by the AO. 30. On appeal by the assessee; the CIT (A), following the decision of the Hon'ble Supreme Court in the case of UCO Bank 240 ITR 355(SC) and decision of ITAT in Assessee’s own case in AY 03-04 in ITA ITA Nos. 578 & 653/Bang/2012 Page 29 of 49 No.253/Bang/2007 dated 24.1.2008, deleted the disallowance made by the Assessing Officer. Aggrieved by the order of the CIT (A), Revenue has preferred the present appeal before the Tribunal. 31. The learned DR relied on the order of…

Ing Vysya Bank Ltd vs. ACIT

In the result, revenue’s appeal for Assessment Year 2007-08 is dismissed

ITA 898/BANG/2013[2007-08]Status: DisposedITAT Bangalore06 Feb 2015AY 2007-08

Bench: Shri Rajpal Yadav & Shri Jason P. Boaz

For Appellant: Shri S. Ananthan, C.AFor Respondent: Shri Farhat Hussain Qureshi, CIT (D.R)
Section 115JSection 143(3)

…der of assessment be confirmed. ITA Noss.898 & 967/Bang/2013 24 15.3 In appellate proceedings, the learned Authorised Representative reiterated the submissions made before the authorities below and placed reliance on the following decisions :- i) UCO Bank – 240 ITR 355 (SC). ii) Woodward Governor India (P) Ltd., 312 ITR 254 (SC) iii) DCIT V Bank of Bahrain & Kuwait – 41 SOT 290 (Mum)(SB) iv) Edelweiss Capital Ltd., 6 Taxmann.Com 157 (Mum) v) Shirhan Bank 23 TAxmann.Com 449 (Mum) The learned Authorised Representative prayed for the order of the learned CIT (Appeals) on this issue to be upheld. 15.4.1 We have h…

DCIT vs. Ing Vysya Bank, Bangalore

In the result, appeal by the Assessee is partly allowed while the 68

ITA 318/BANG/2013[2005-06]Status: DisposedITAT Bangalore06 Feb 2015AY 2005-06

Bench: Shri N.V. Vasudevan & Shri Abraham P. Georgeassessment Year : 2005-06 M/S. Ing Vysya Bank Ltd., Vs. The Assistant Commissioner Of Ing Vysya House, Income Tax, No.22, M.G. Road, Circle 11(4), Bangalore – 560 001. Bangalore. Pan: Aabct 0529M Appellant Respondent Assessment Year : 2005-06 The Deputy Commissioner Of Vs. M/S. Ing Vysya Bank Ltd., Income Tax, Bangalore – 560 001. Circle 11(4), Pan: Aabct 0529M Bangalore. Appellant Respondent Assessee By : Shri S. Ananthan, C.A. Revenue By : Shri C.H. Sundar Rao, Cit-I(Dr) Date Of Hearing : 20.01.2015 Date Of Pronouncement : 06.02.2015 O R D E R Per N.V. Vasudevan

For Appellant: Shri S. Ananthan, C.AFor Respondent: Shri C.H. Sundar Rao, CIT-I(DR)
Section 1Section 10Section 234D

…method of accounting system, there is no justification in interfering with the order of the Commissioner of Income-tax (Appeals) on this issue of amortization of premium on government securities. United Commercial Bank v. CIT (1999) 156 CTR (SC) 380 ; (1999) 240 ITR 355 (SC) and South Indian Bank Ltd., (ITA No.126/Coch/2004, dated.___ Sept, 2005 followed." ITA No.288 & 318/Bang/2013 Page 14 of 50 (ii) The Khanapur Co-op Bank Ltd v. ITO – ITA No.141/PNJ/2011, dated.8.9.2011 : The Hon'ble Bench of Panaji Tribunal had recorded its findings that "6. Likewise, the premium amortized at Rs.1,78,098/- is claimed to be…

Ing Vysya Bank Ltd vs. ACIT, Bangalore

In the result, appeal by the Assessee is partly allowed while the 68

ITA 288/BANG/2013[2005-06]Status: DisposedITAT Bangalore06 Feb 2015AY 2005-06

Bench: Shri N.V. Vasudevan & Shri Abraham P. Georgeassessment Year : 2005-06 M/S. Ing Vysya Bank Ltd., Vs. The Assistant Commissioner Of Ing Vysya House, Income Tax, No.22, M.G. Road, Circle 11(4), Bangalore – 560 001. Bangalore. Pan: Aabct 0529M Appellant Respondent Assessment Year : 2005-06 The Deputy Commissioner Of Vs. M/S. Ing Vysya Bank Ltd., Income Tax, Bangalore – 560 001. Circle 11(4), Pan: Aabct 0529M Bangalore. Appellant Respondent Assessee By : Shri S. Ananthan, C.A. Revenue By : Shri C.H. Sundar Rao, Cit-I(Dr) Date Of Hearing : 20.01.2015 Date Of Pronouncement : 06.02.2015 O R D E R Per N.V. Vasudevan

For Appellant: Shri S. Ananthan, C.AFor Respondent: Shri C.H. Sundar Rao, CIT-I(DR)
Section 1Section 10Section 234D

…method of accounting system, there is no justification in interfering with the order of the Commissioner of Income-tax (Appeals) on this issue of amortization of premium on government securities. United Commercial Bank v. CIT (1999) 156 CTR (SC) 380 ; (1999) 240 ITR 355 (SC) and South Indian Bank Ltd., (ITA No.126/Coch/2004, dated.___ Sept, 2005 followed." ITA No.288 & 318/Bang/2013 Page 14 of 50 (ii) The Khanapur Co-op Bank Ltd v. ITO – ITA No.141/PNJ/2011, dated.8.9.2011 : The Hon'ble Bench of Panaji Tribunal had recorded its findings that "6. Likewise, the premium amortized at Rs.1,78,098/- is claimed to be…

Punjab & Sind Bank vs. Commissioner of Income Tax V& Anr

The appeals are disposed of in the aforesaid terms with no order as to

ITA/660/2009HC Delhi12 Sept 2012

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 143(3)Section 154

…that income from the securities is to be assessed as „business income‟. These admitted facts clinchly prove that the securities were „stock in trade‟. Reliance was placed on the judgment of the Supreme Court in the case of United Commercial Bank v. CIT, 240 ITR 355 (SC) to support this submission. ITA 634/2009 & 660/2009 Page 6 of 12 7. Learned counsel additionally pointed out that in the earlier assessment years,…

Punjab & Sind Bank vs. Commissioner of Income Tax V & Anr

The appeals are disposed of in the aforesaid terms with no order as to

ITA - 634 / 2009HC Delhi12 Sept 2012
Section 143(3)Section 154

…that income from the securities is to be assessed as „business income‟. These admitted facts clinchly prove that the securities were „stock in trade‟. Reliance was placed on the judgment of the Supreme Court in the case of United Commercial Bank v. CIT, 240 ITR 355 (SC) to support this submission. 2012:DHC:5656-DB ITA 634/2009 & 660/2009 Page 6 of 12 7. Learned counsel additionally pointed out that in the earlier a…

Punjab and Sind Bank

The appeals are disposed of in the aforesaid terms with no order as to

ITA/634/2009HC Delhi12 Sept 2012
Section 143(3)Section 154

…that income from the securities is to be assessed as „business income‟. These admitted facts clinchly prove that the securities were „stock in trade‟. Reliance was placed on the judgment of the Supreme Court in the case of United Commercial Bank v. CIT, 240 ITR 355 (SC) to support this submission. 2012:DHC:5656-DB ITA 634/2009 & 660/2009 Page 6 of 12 7. Learned counsel additionally pointed out that in the earlier a…

The Commissioner of Income Tax vs. M/S Canara Bank

The appeal is dismissed

ITA/1322/2006HC Karnataka24 Jul 2012

Bench: B.MANOHAR,K.SREEDHAR RAO

Section 260ASection 29Section 56Section 56(2)

…___________ ___________ Grand Total (I and II) 5. The Schedule-VIII is the format of the Balance Sheet as required under Section 29 of the Banking Regulation Act. The Hon'ble Supreme Court in UCO BANK v/s CIT 6 reported in (1999) 240 ITR 355 has held that the stocks and securities held by the Banks and the income derived therein constitute business income. The decision of the Hon'ble Supreme Court in BROOKE BOND AND CO. LTD. v/s CIT reported in (1986) 162 ITR 373 held that the dividend from the shares shall constitute income from other sources unless the said income is from t…

Commissioner of Income Tax, Delhi vs. M/S Woodward Governor India P. Ltd

C.A. No.-002206-002206 - 2009Supreme Court08 Apr 2009
Section 143Section 143(1)(a)Section 143(2)Section 37(1)Section 43(1)

…due is brought into credit before it is actually received; it brings into debit an expenditure for which a legal liability has been incurred before it is actually disbursed. (see judgment of this Court in the case of United Commercial Bank v. CIT reported in 240 ITR 355). Therefore, the accounting method followed by an assessee continuously for a given period of time needs to be presumed to be correct till the AO comes to the conclusion for reasons to be given that the system does not reflect true and correct profits. As stated, there is no finding given by the AO on the correctness of the accounting standard fo…