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 367,154 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

Income Tax Officer Ward- Seoni, Seoni vs. Jila Sahkari Kendriya Bank Maryadit, Seoni

In the result, all the Appeals and CO (# 7/2018) are allowed for statistical purposes, and CO (# 5/2018) is partly allowed for statistical purposes

ITA 100/JAB/2018[2014-15]Status: DisposedITAT Jabalpur20 Apr 2022AY 2014-15

Bench: Shri Sanjay Arora, Hon’Ble & Shri Manomohan Das, Hon'Ble

For Appellant: Shri B.Ganguly, AdvocateFor Respondent: Shri Shravan Ku. Gotru, CIT-DR
Section 36(1)(viia)Section 37(1)Section 43D

…ext may be made to AS9 by ICAI, the regulatory accounting body in India. The law in the matter is well-settled, and for which one may refer to the decisions by the Apex Court, as in UCO Bank v. CIT [1999] 237 ITR 889 (SC); United Commercial Bank v. CIT [1999] 240 ITR 355; Godra Electricity Co. Ltd. v. CIT [1997] 225 ITR 746 (SC), to cite some, also relied upon by the assessee, wherein it stands clarified that accrual of income is to be judged in the light of the reality of the situation. There is thus no question of accrual of such interest income. (AYs. 2009-10, 2013-14 & 2014-15) C.O.Nos. 05 & 07/JAB/2018 Jila…

The JCIT, Circle-1(1)(1), Ahmedabad vs. M/S. Adani Hazira Port Pvt. Ltd., Ahmedabad

In the result, appeal of the Revenue is dismissed

ITA 1131/AHD/2019[2014-15]Status: DisposedITAT Ahmedabad06 Apr 2022AY 2014-15

Bench: Ms. Suchitra Kamble & Shri Bhagirath Mal Biyani

For Appellant: Shri Mohd. Usman, CIT D.RFor Respondent: Shri Vartik Choksi, A.R. &
Section 129Section 142(1)Section 143(2)Section 14A

…ITA No.1131/Ahd/2019 Assessment Year: 2014-15 Page 1 of 11 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER (Conducted through Virtual Court) Assessment Years: 2014-15 The J.C.I.T., vs. M/s Adani Hazira Port Pvt. Ltd., Circle – 1(1)(1)-(OSD), Adani House, Ahmedabad. Near Mithakali Six Road, Navrangpura, Ahmedabad. [PAN – AAICA 0970 E] (Appellant) (Respondent) Appellant by : Shri Mohd. Usman, CIT D.R. Respondent by : Shri Vartik Choksi, A.R. & Shri Biren Shah, A.R. Date of hearing : 16.03.2022 Dat…

DCIT 2(2), Mumbai vs. State Bank of India, Mumbai

ITA 4951/MUM/2013[2005-06]Status: DisposedITAT Mumbai22 Mar 2022AY 2005-06

Bench: Shri M. Balaganesh & Shri Kuldip Singhassessment Year: 2005-06 M/S. State Bank Of India, Dcit, Financial Reporting & Circle -2(2), Taxation Dept., Mumbai 3Rd Floor, Vs. Corporate Centre, Madam Cama Road, Nariman Point, Mumbai – 400 021 Pan: Aaacs8577K (Appellant) (Respondent) Assessment Year: 2005-06 Office Of The Dcit-2(2), M/S. State Bank Of India, R.No.545, Central Office, Aayakar Bhavan, Accounts & Compliance M.K. Road, Dept., Vs. 14Th Floor, Mumbai- 400 020 Madam Cama Rd., Nariman Point, Mumbai – 400 021 Pan: Aaacs8577K (Appellant) (Respondent)

For Appellant: Shri Ketan Ved, A.RFor Respondent: Shri Anand Mohan, D.R
Section 14Section 14ASection 36Section 41(4)

…644/M/2016 and has also placed reliance on decision rendered by the Hon’ble High Court of Madras in case of CIT vs. Chari & Ram (1949) 17 ITR 1 (Madras) and on the decision rendered by the Hon’ble Apex Court in case of United Commercial Bank vs. CIT (1999) 240 ITR 355 (SC). This factual position has not been controverted by the Ld. D.R. for the Revenue. 28 ITA No.3685/M/2013 & ITA No.4951/M/2013 M/s. State Bank of India 28. We have perused the order passed by the co-ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2008-09 qua identical issue which has been decided in favour of the assessee b…

State Bank of India, Mumbai vs. DCIT Cir 2(2), Mumbai

ITA 3685/MUM/2013[2005-06]Status: DisposedITAT Mumbai22 Mar 2022AY 2005-06

Bench: Shri M. Balaganesh & Shri Kuldip Singhassessment Year: 2005-06 M/S. State Bank Of India, Dcit, Financial Reporting & Circle -2(2), Taxation Dept., Mumbai 3Rd Floor, Vs. Corporate Centre, Madam Cama Road, Nariman Point, Mumbai – 400 021 Pan: Aaacs8577K (Appellant) (Respondent) Assessment Year: 2005-06 Office Of The Dcit-2(2), M/S. State Bank Of India, R.No.545, Central Office, Aayakar Bhavan, Accounts & Compliance M.K. Road, Dept., Vs. 14Th Floor, Mumbai- 400 020 Madam Cama Rd., Nariman Point, Mumbai – 400 021 Pan: Aaacs8577K (Appellant) (Respondent)

For Appellant: Shri Ketan Ved, A.RFor Respondent: Shri Anand Mohan, D.R
Section 14Section 14ASection 36Section 41(4)

…644/M/2016 and has also placed reliance on decision rendered by the Hon’ble High Court of Madras in case of CIT vs. Chari & Ram (1949) 17 ITR 1 (Madras) and on the decision rendered by the Hon’ble Apex Court in case of United Commercial Bank vs. CIT (1999) 240 ITR 355 (SC). This factual position has not been controverted by the Ld. D.R. for the Revenue. 28 ITA No.3685/M/2013 & ITA No.4951/M/2013 M/s. State Bank of India 28. We have perused the order passed by the co-ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2008-09 qua identical issue which has been decided in favour of the assessee b…

Joint Commissioner of Income Tax, Ltu, Bengaluru vs. M/S. Vijaya Bank, Bengaluru

In the result, the appeal filed by the Revenue is partly allowed for statistical purposes

ITA 1834/BANG/2018[2014-15]Status: DisposedITAT Bangalore11 Mar 2022AY 2014-15

Bench: Shri George George K & Ms. Padmavathy Sassessment Year : 2014-15

For Appellant: Shri Ananthan, C.A &For Respondent: Shri Pradeep Kumar, CIT(DR)
Section 115JSection 143(3)Section 234DSection 36(1)(vii)Section 36(1)(viia)Section 36(2)(v)Section 37(1)(vii)

…he 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…

ACIT, Circle-20(1), New Delhi vs. Punjab & Sind Bank, New Delhi

In the result, the appeals filed by the Revenue challenging the judgment of the Punjab and Haryana High Court in State Bank of Patiala also fail, though law in this respect has been clarified herei...

ITA 631/DEL/2019[2014-15]Status: DisposedITAT Delhi05 Jan 2022AY 2014-15

Bench: Sh. Anil Chaturvedi & Sh. Narender Kumar Choudhary(Through Video Conferencing) Acit Vs. Punjab & Sind Bank Circle – 20(1) Ho-Accounts & Audit New Delhi Department, 1St Floor, 21-Rajendra Place, New Delhi – 110 008 Pan : Aaacp 1206 G (Appellant) (Respondent)

Section 115JSection 143(3)Section 14ASection 36(1)(iv)

…antile system, they are entitled to show his real income by taking into account market value of such investments in arriving at real taxable income. All the aspects argued by the Ld. DR were considered by the Hon’ble Apex Court in the case of UCO Bank vs. CIT 240 ITR 355 (SC) and were held in favour of the assessee. The decision in Southern Technologies Ltd (supra) has no application to the facts of the case. 13. There is consistency of the facts on this aspect quite for a long time and all possible arguments have come before the adjudicatory authorities. On a careful consideration of the matter in the light of…

M/S. Vijaya Bank, Bangalore vs. Joint Commissioner of Income Tax, Ltu, Bangalore

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes

ITA 1838/BANG/2018[2013-14]Status: DisposedITAT Bangalore28 Dec 2021AY 2013-14

Bench: Shri George George K. & Shri B.R. Baskaranassessment Year : 2013-14

For Appellant: Shri S. Ananthan, A.RFor Respondent: Shri Pradeep Kumar, D.R
Section 115JSection 143(3)Section 14ASection 194JSection 36(1)(vii)Section 36(1)(viia)Section 40

…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…

Joint Commissioner of Income Tax, Ltu, Bengaluru vs. M/S. Vijaya Bank, Bengaluru

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes

ITA 1833/BANG/2018[2013-14]Status: DisposedITAT Bangalore28 Dec 2021AY 2013-14

Bench: Shri George George K. & Shri B.R. Baskaranassessment Year : 2013-14

For Appellant: Shri S. Ananthan, A.RFor Respondent: Shri Pradeep Kumar, D.R
Section 115JSection 143(3)Section 14ASection 194JSection 36(1)(vii)Section 36(1)(viia)Section 40

…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…

63 Moons Technologies Ltd. (Formerly Known As Financial Technologies (India) Ltd.), Mumbai vs. DCIT, Cent. Cir. - 8(3), Mumbai

In the result, assessee’s appeals are partly allowed

ITA 4775/MUM/2016[2009-10]Status: DisposedITAT Mumbai16 Dec 2021AY 2009-10

Bench: Shri Shamim Yahya (Am) & Shri Amarjit Singh (Jm)

For Appellant: Shri Chetan A.KariaFor Respondent: Shri Vatsalya Saxena
Section 14ASection 14A(1)Section 40Section 92C

…d by the Hon'ble Supreme Court in the following cases that entries in books of accounts are not determinative of its tax treatment: - Kedarnath Jute 82 ITR 363 (SC) - Godhra Electricity 225 ITR 746 (SC) - Bokara Steel 236 ITR 315 (SC) - United Commercial Bank 240 ITR 355 (SC) The assessee submits that adopting differing treatment in books of accounts and Income Tax Return cannot be equated with shifting stand. The assessee respectfully submits that it has not shifted its stand. What the assessee has done is computed its income as per specific provisions of law independent of treatment in its books of accounts and…

ITO (E) -1(1), Mumbai vs. Aditya Birla Foundation, Mumbai

In the result, Revenue’s appeal is partly allowed

ITA 6279/MUM/2019[2012-13]Status: DisposedITAT Mumbai28 Oct 2021AY 2012-13

Bench: The Hon'Ble Itat In Its Own Case In A.Y.2011-12 Which Is Pending For Adjudication."

Section 11Section 11(2)Section 13(3)Section 25

…(300 ITR 214) (SC) challenged the order of 3. Hiralal Bhagwati v. CIT(246ITR 188)(Guj.) CIT(A) before ITAT for AY 4. DIT(I-) v. Gemological Institute of India [2019] 263 2011-12 Taxman 348 (SC) 2 CIT(A) erred in holding that 5. United Commercial Bank v. CIT (240 ITR 355)(SC) interest income is 6. J.K Bankers v. CIT (94 ITR 107) (All. HC) assessable on receipt basis 7. CIT v. Ganga Charity Trust Fund (162 ITR 612) (Guj) instead of Mercantile 3 Aditya Birla Foundation WITHOUT PREJUDICE, IN AY 2011-12, THE ITAT HAS HELD AS UNDER: 13. In this view of the matter the Assessing Officer is correct principally in holdi…

Mumbai District Central Co-Op Bank Ltd., Mumbai vs. ITO 1 (3)(1), Mumbai

In the result, the appeal is allowed in the terms indicated above

ITA 6990/MUM/2019[2010-11]Status: DisposedITAT Mumbai18 Oct 2021AY 2010-11
Section 143(3)Section 263Section 37

…ITA No. 6990/Mum/2019 Assessment year: 2010-11 Page 1 of 7 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI‘F’ BENCH, MUMBAI [Coram: Pramod Kumar (Vice President), and Pavan Kumar Gadale (Judicial Member)] Assessment year: 2010-11 Mumbai District Central Co-op Bank Ltd ……………….………Appellant Mumbai Bank Bhawan, 207, Dr. D.N Road, Fort, Mumbai 400001[PAN: AAAAM3185D] Vs Income Tax Officer -1(3)(1) Mumbai. ……………………Respondent Appearances by Ravi Sawanafor the appellant S N Kabrafor the respondent Date of concluding the hearing : 18/10/2021 Date of pronouncement of order : 18/10/2021 ORAL ORDER (Dictated in the open court)…

State Bank of India, Mumbai vs. Asst CIT Cir 2(2), Mumbai

In the result, appeal of the Revenue in ITA No

ITA 3779/MUM/2012[2003-04]Status: DisposedITAT Mumbai30 Sept 2021AY 2003-04
Section 143(3)

…ere is no provision of law or principle according to which the assessee could be compelled to adopt either the average cost for all the items or the market rate for all the items. Further, the Supreme Court in the case of United Commercial Bank vs. CIT [1999] 240 ITR 355 (SC) has held that there is no such question of following two different methods for valuing its stock-in-trade (investments) because bank was required to prepare balance sheet in the prescribed form and it had no option to change it and for the purpose of income-tax, what is taxed is the real income which is to be deduced on the basis of the acco…

Edelcap Securities Ltd, Mumbai vs. ACIT, Circle 3(1)(2), Mumbai

In the result, all the appeals of the Revenue as well as the assessee are partly allowed

ITA 6889/MUM/2018[2013-14]Status: DisposedITAT Mumbai28 Sept 2021AY 2013-14
Section 115JSection 143(3)

…reliance on the decisions of the Hon‟ble Supreme Court in the case of CIT vs. Woodward Governor India Pvt. Ltd., reported in 312 ITR 254; Oil and Natural Gas Corporation Ltd., (ONGC) vs. CIT reported in 322 ITR 180; United Commercial Bank vs. CIT reported in 240 ITR 355. Apart from this, assessee also placed reliance on the decision of this Tribunal in the case of Edelweiss Capital Ltd., vs. ITO in ITA No.5324/Mum/2007, Edelweiss Securities Ltd., in ITA No.2193/Mum/2009, ITA No.7792/Mum/2012 and ITA No.5939/Mum/2011 among other cases. The assessee also stated M/s. Edelcap Securities Ltd., M/s. Ecap Equities & M/…

DCIT 10(1)(2), Mumbai vs. Kdd India P. Ltd, Mumbai

Appeal of the Revenue is dismissed being devoid of any merit

ITA 3408/MUM/2019[2014-15]Status: DisposedITAT Mumbai01 Sept 2021AY 2014-15

Bench: Shri Shamim Yahya & Shri Vikas Awasthyआ.अ. सं. 3408/मुं/2019 (िन.व. 2014-15)

For Appellant: Shri Gurbinder SinghFor Respondent: Shri Lalchand Choudhary
Section 143(3)Section 35DSection 37(1)

…e Act [See - Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC); Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT [1997] 227 ITR 172/93 Taxman 502 (SC); Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1 (SC) and United Commercial Bank v. CIT [1999] 240 ITR 355/106 Taxman 601 (SC). 20. At the most, an inference can be drawn that by showing this expenditure in a spread over manner in the books of account, the assessee had initially intended to make such an option. However, it abandoned the same before reaching the crucial stage, inasmuch as, in the income tax return filed by the assessee, it chose to cla…

Punjab & Sind Bank, New Delhi vs. ACIT, Circle- 20(1), New Delhi

In the result, the appeal filed by the assessee is allowed and

ITA 781/DEL/2018[2013-14]Status: DisposedITAT Delhi12 Jul 2021AY 2013-14

Bench: Sh. N. K. Billaiya & Sh. Mahavir Prasad(Through Video Conferencing) Assessment Year: 2013-14

Section 115JSection 14Section 14A

…onclusion that there was an escapement of. income due to the preparation of the balance sheet in a particular way, as prescribed by the RBI. 12. If we appreciate the facts of this case in the light of the decision of the Hon’ble Apex Court in UCO Bank vs. CIT 240 ITR 355 (SC), it is clear that since the assessee has been maintaining its accounts on mercantile system, they are entitled to show his real income by taking into account market value of such investments in arriving at real taxable income. All the aspects argued by the Ld. DR were considered by the Hon’ble Apex Court in the case of UCO Bank vs. CIT 240 I…

ACIT, Circle-20(1), New Delhi vs. Punjab & Sind Bank, New Delhi

In the result, the appeal filed by the assessee is allowed and

ITA 1208/DEL/2018[2013-14]Status: DisposedITAT Delhi12 Jul 2021AY 2013-14

Bench: Sh. N. K. Billaiya & Sh. Mahavir Singh(Through Video Conferencing) Assessment Year: 2013-14

Section 115JSection 14Section 14A

…onclusion that there was an escapement of. income due to the preparation of the balance sheet in a particular way, as prescribed by the RBI. 12. If we appreciate the facts of this case in the light of the decision of the Hon’ble Apex Court in UCO Bank vs. CIT 240 ITR 355 (SC), it is clear that since the assessee has been maintaining its accounts on mercantile system, they are entitled to show his real income by taking into account market value of such investments in arriving at real taxable income. All the aspects argued by the Ld. DR were considered by the Hon’ble Apex Court in the case of UCO Bank vs. CIT 240 I…

Technologies Ltd) vs. ACIT

Appeals are allowed

ITA/214/2020HC Delhi05 Jul 2021
For Appellant: -.................................................................... 8For Respondent: - .................................................................. 10
Section 10BSection 143(3)Section 14ASection 254Section 35D

…ct [See - Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC); Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT [1997] 227 ITR 172/93 Taxman 502 (SC); Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1 (SC) and United Commercial Bank v. CIT [1999] 240 ITR 355/106 Taxman 601 (SC). 20. At the most, an inference can be drawn that by showing this expenditure in a spread over manner in the books of account, the assessee had initially intended to make such an option. However, it abandoned the same before reaching the crucial stage, inasmuch as, in the income tax return filed by the assessee, it chose to…

Technologies Ltd) vs. ACIT

Appeals are allowed

ITA/215/2020HC Delhi05 Jul 2021
For Appellant: -.................................................................... 8For Respondent: - .................................................................. 10
Section 10BSection 143(3)Section 14ASection 254Section 35D

…ct [See - Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC); Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT [1997] 227 ITR 172/93 Taxman 502 (SC); Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1 (SC) and United Commercial Bank v. CIT [1999] 240 ITR 355/106 Taxman 601 (SC). 20. At the most, an inference can be drawn that by showing this expenditure in a spread over manner in the books of account, the assessee had initially intended to make such an option. However, it abandoned the same before reaching the crucial stage, inasmuch as, in the income tax return filed by the assessee, it chose to…

Technologies Ltd) vs. ACIT

Appeals are allowed

ITA/213/2020HC Delhi05 Jul 2021
For Appellant: -.................................................................... 8For Respondent: - .................................................................. 10
Section 10BSection 143(3)Section 14ASection 254Section 35D

…ct [See - Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC); Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT [1997] 227 ITR 172/93 Taxman 502 (SC); Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1 (SC) and United Commercial Bank v. CIT [1999] 240 ITR 355/106 Taxman 601 (SC). 20. At the most, an inference can be drawn that by showing this expenditure in a spread over manner in the books of account, the assessee had initially intended to make such an option. However, it abandoned the same before reaching the crucial stage, inasmuch as, in the income tax return filed by the assessee, it chose to…

Daawat Foods Ltd., New Delhi vs. ACIT, New Delhi

Appeal are dismissed

ITA 4159/DEL/2013[2009-10]Status: DisposedITAT Delhi07 Jun 2021AY 2009-10

Bench: Shri R. K. Panda & Ms Suchitra Kamble(Through Video Conferencing)

Section 132Section 142Section 143(3)Section 14ASection 40Section 40A(3)Section 69Section 80I

…taxable income by various Courts and Tribunals from time to time. In this context, the decisions of the Apex Court in case of Chainrup Sampatram vs. CIT 24 ITR 481 and CIT vs. British Paints India Ltd. 188 ITR 44 (SC) along with United Commercial Bank vs. CIT 240 ITR 355 (SC) relied by the Ld. AR are applicable in the present case. Further, there is no evidence for undisclosed sale which was pointed out by the Assessing Officer or by the CIT(A) in their respective orders. Thus, the addition made by the Assessing Officer which was confirmed by the CIT(A) does not sustain. Ground No. 15 to 17 are allowed. 18. Now w…