V.K.J Builders and Contractors P Ltd. v. CIT

318 ITR 204Supreme Court of India2009#4845 most cited

What is V.K.J Builders and Contractors P Ltd. v. CIT authority for?

The closing stock of an earlier accounting year must form the opening stock of the subsequent accounting year. This principle is applied when assessing total income, particularly concerning the valuation of stock.

24

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2016 to 2025.

Also referred to as

V.K.J Builders and Contractors P Ltd. v. CIT · 318 ITR 204 · SC · closing stock · opening stock · previous year · assessment year · business income · section 143(3) · total income

Sections most often in play

Section 143(3)Section 158ABSection 254Section 69

Issues it is cited on

previous yearbusinesscompanysection 143(3)total incomeinterest

Judgments citing V.K.J Builders and Contractors P Ltd. v. CIT

M/S. Bengal Omnitech Nirman Ltd., Kolkata vs. A.C.I.T./I.T.O., Ward - 8(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 1551/KOL/2024[2018-2019]Status: DisposedITAT Kolkata02 Dec 2025AY 2018-2019

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm

For Appellant: S/Shri S.M. Surana &For Respondent: Shri Pankaj Pandey, DR
Section 36(1)(vii)

…s directed to delete the addition. Before parting we would like to mention that these is a Revenue neutral addition as the closing stock of one year becomes the opening stock of the next year as has been in the case of V.K.J Builders and Contractors Pvt. Itd. 318 ITR 204 (SC). Further, when there is no revenue effect the mater and the addition is revenue neutral, no addition should be made and should not be disputed by revenue as has been held in the case of CIT vs. Excel Industries Ltd. [2013] 358 ITR 295 (SC)/[2013] 262 CTR 261 (SC)[08-10-2013]. 6. 3. Considering the above facts and circumstances and also the…

Deputy Commissioner of Income Tax, Corporate Circle, Coimbatore vs. Ms Elgi Electric and Industires Ltd, Coimbatore

In the result, the appeal filed by the Revenue is dismissed

ITA 1085/CHNY/2023[2011-12]Status: DisposedITAT Chennai09 Oct 2024AY 2011-12

Bench: Shri S.S. Viswanethra Ravi & Shri Amitabh Shuklaआयकर अपील सं./I.T.A. No.1085/Chny/2023 िनधा"रण वष"/Assessment Year: 2011-12 The Deputy Commissioner Of Vs. M/S. Elgi Electric & Industries Ltd. Income Tax, 737-D, Elgi Towers, Puliyakulam Corporate Circle 1, Green Fields, Coimbatore 641 045. Coimbatore. [Pan: Aaace4787H] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Ms. Gouthami Manivasagam, Jcit ""थ" की ओर से/Respondent By : Ms. Sandhyaarthi, F.C.A. सुनवाई की तारीख/ Date Of Hearing : 01.10.2024 घोषणा की तारीख /Date Of Pronouncement : 09.10.2024 आदेश /O R D E R Per S.S. Viswanethra Ravi:

For Appellant: Ms. Gouthami Manivasagam, JCITFor Respondent: Ms. Sandhyaarthi, F.C.A
Section 143(3)Section 158ASection 69

…onsidering non-existing stocks claimed by the assessee for the purpose bank loan as opening stock of next assessment year by placing reliance on the decision of the Hon’ble Supreme Court in the case of VKJ Builders and Contractors Pvt. Ltd. v. CIT reported in 318 ITR 204 (SC). 4. Brief facts relating to the case are that the assessee filed return of income declaring total income at ₹.NIL after adjusting business loss of ₹.2,46,305/-. The assessment was completed under section 143(3) of the Act vide order dated 31.03.2014, inter alia making addition on account of difference in closing stock of ₹.76,28,385/- by ad…

Bg Exploration & Production India Limited, Mumbai vs. The Deputy Commissioner of Income Tax, DDIT/ADIT (International Taxation), Circle -1, Dehradun

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

ITA 5/DDN/2022[2017-2018]Status: DisposedITAT Dehradun31 Mar 2022AY 2017-2018
For Appellant: Shri Ajay Vohra, Sr. Advocate &For Respondent: Shri T.S. Mapwal, Sr. DR
Section 143(3)Section 144C(13)Section 92C

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : DB : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER Assessment Year: 2017-18 BG Exploration & Production India Vs The DCIT, Limited, International Taxation, C/o Dloitte Haskins and Sells LLP Addl. National E-Assessment Lotus Corporate Park, Circle-1, 1st Floor, Wing A-G, CST No.185/A, Dehradun. Jay Koach of Western Express, Highway, Goregaon, East Mumbai, Maharashtra – 400 013. PAN: AAACE4569K (Appellant) (Respondent) Assessee by : Shri Ajay Vohra, Sr. Advocate & Shri Saksham Singhal, Advocate Revenue by : Shri T.S.…

M/S. Oscar Udyog Limited, Bangalore vs. Income Tax Officer, Ward- 5(1)(2), Bangalore

In the result, the assessee’s appeal is dismissed

ITA 2087/BANG/2019[2007-08]Status: DisposedITAT Bangalore27 Dec 2021AY 2007-08

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2007-08

For Appellant: Shri Balaram R. Rao, AdvocateFor Respondent: Shri Priyadarshini Besaganni, Jt.CIT(DR)(ITAT)
Section 133ASection 234

…ich was reduced from the opening stock in the assessment year under consideration since it had been offered in the previous year relevant to AY 2006-07. He relied on the judgment of Supreme Court n the case of V.K.J. Builders and Contractors Pvt. Ltd. v. CIT, 318 ITR 204 (SC) wherein it was held that closing stock of earlier year has to be treated as opening stock of subsequent year, therefore opening stock of current year shows a lower value than the value of closing stock of earlier year as finally determined by the AO. Page 4 of 6 7. He has also relied on the judgment of Karnataka High Court in the case of CI…

Bg Exploration & Production India Limited, Mumbai vs. The Deputy Commissioner of Income Tax DDIT/ADIT (International Taxation ) Circle-1, Dehradun

In the result, the appeal of the assessee is partly allowed

ITA 7/DDN/2021[2016-17]Status: DisposedITAT Dehradun14 Dec 2021AY 2016-17

Bench: Shri R.K. Panda & Shri V.P. Raoassessment Years: 2016-17

For Appellant: Sh. Ajay Vohra, Sr. AdvocateFor Respondent: Sh. N.S. Jangpangi, CIT/DR
Section 143(3)Section 144C(13)Section 144C(5)Section 44C

…k of the year preceding will also have to change and correspondingly the value of the opening stock of that year and so on.” 51. Reliance was also placed on the decisions of the Hon’ble Supreme Court in the case of VKJ Builders & Contractors PLimited v. CIT (318 ITR 204) wherein it has been held that it is the fundamental principle of accountancy that the figure of the closing stock of the earlier year has to form the opening stock of the next accounting year.To the same effect is the decision of the Hon'ble Bombay High Court in the case of CIT v. Corporation Bank Limited (174 ITR 616). 52. In view of the above…

Deputy Commissioner of Income Tax, Circle- 1(1)(2), Bangalore vs. M/S. Bharat Fritz Werner Limited, Bangalore

In the result, all the appeals of the assessee are treated as allowed and all the appeals of the revenue are dismissed

ITA 2247/BANG/2019[2013-14]Status: DisposedITAT Bangalore30 Sept 2021AY 2013-14

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

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Ms. Neera Malhotra, D.R

…akes have happened prior to 31.3.2009. He submitted that the closing stock shown on 31.3.2009 shall become opening stock as on 1.4.2009. The Hon’ble Supreme Court has also reiterated this view in the case of V.K.J Builders and Contractors P Ltd vs. CIT (2009)(318 ITR 204). Hence the closing stock as on 31.3.2009 came to be overvalued by Rs.22.49 crores. Accordingly, while bringing the same in FY 2009-10, i.e., on 1.4.2009, the assessee has reduced the opening stock of raw materials and work in progress with the value of shortage of inventory and disclosed the same as an exceptional item in the Profit and Loss acc…

Deputy Commissioner of Income Tax, Circle- 1(1)(2), Bangalore vs. M/S. Bharat Fritz Werner Limited, Bangalore

In the result, all the appeals of the assessee are treated as allowed and all the appeals of the revenue are dismissed

ITA 2246/BANG/2019[2012-13]Status: DisposedITAT Bangalore30 Sept 2021AY 2012-13

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

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Ms. Neera Malhotra, D.R

…akes have happened prior to 31.3.2009. He submitted that the closing stock shown on 31.3.2009 shall become opening stock as on 1.4.2009. The Hon’ble Supreme Court has also reiterated this view in the case of V.K.J Builders and Contractors P Ltd vs. CIT (2009)(318 ITR 204). Hence the closing stock as on 31.3.2009 came to be overvalued by Rs.22.49 crores. Accordingly, while bringing the same in FY 2009-10, i.e., on 1.4.2009, the assessee has reduced the opening stock of raw materials and work in progress with the value of shortage of inventory and disclosed the same as an exceptional item in the Profit and Loss acc…

Deputy Commissioner of Income Tax, Circle- 1(1)(2), Bangalore vs. M/S. Bharat Fritz Werner Limited, Bangalore

In the result, all the appeals of the assessee are treated as allowed and all the appeals of the revenue are dismissed

ITA 2245/BANG/2019[2011-12]Status: DisposedITAT Bangalore30 Sept 2021AY 2011-12

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

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Ms. Neera Malhotra, D.R

…akes have happened prior to 31.3.2009. He submitted that the closing stock shown on 31.3.2009 shall become opening stock as on 1.4.2009. The Hon’ble Supreme Court has also reiterated this view in the case of V.K.J Builders and Contractors P Ltd vs. CIT (2009)(318 ITR 204). Hence the closing stock as on 31.3.2009 came to be overvalued by Rs.22.49 crores. Accordingly, while bringing the same in FY 2009-10, i.e., on 1.4.2009, the assessee has reduced the opening stock of raw materials and work in progress with the value of shortage of inventory and disclosed the same as an exceptional item in the Profit and Loss acc…

Deputy Commissioner of Income Tax, Circle- 1(1)(2), Bangalore vs. M/S. Bharat Fritz Werner Limited, Bangalore

In the result, all the appeals of the assessee are treated as allowed and all the appeals of the revenue are dismissed

ITA 2244/BANG/2019[2010-11]Status: DisposedITAT Bangalore30 Sept 2021AY 2010-11

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

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Ms. Neera Malhotra, D.R

…akes have happened prior to 31.3.2009. He submitted that the closing stock shown on 31.3.2009 shall become opening stock as on 1.4.2009. The Hon’ble Supreme Court has also reiterated this view in the case of V.K.J Builders and Contractors P Ltd vs. CIT (2009)(318 ITR 204). Hence the closing stock as on 31.3.2009 came to be overvalued by Rs.22.49 crores. Accordingly, while bringing the same in FY 2009-10, i.e., on 1.4.2009, the assessee has reduced the opening stock of raw materials and work in progress with the value of shortage of inventory and disclosed the same as an exceptional item in the Profit and Loss acc…

M/S. Bhararth Fritz Werner Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 1(1)(2), Bangalore

In the result, all the appeals of the assessee are treated as allowed and all the appeals of the revenue are dismissed

ITA 2049/BANG/2019[2014-15]Status: DisposedITAT Bangalore30 Sept 2021AY 2014-15

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

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Ms. Neera Malhotra, D.R

…akes have happened prior to 31.3.2009. He submitted that the closing stock shown on 31.3.2009 shall become opening stock as on 1.4.2009. The Hon’ble Supreme Court has also reiterated this view in the case of V.K.J Builders and Contractors P Ltd vs. CIT (2009)(318 ITR 204). Hence the closing stock as on 31.3.2009 came to be overvalued by Rs.22.49 crores. Accordingly, while bringing the same in FY 2009-10, i.e., on 1.4.2009, the assessee has reduced the opening stock of raw materials and work in progress with the value of shortage of inventory and disclosed the same as an exceptional item in the Profit and Loss acc…

M/S. Bharath Fritz Werner Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 2(1)(1), Bangalore

In the result, all the appeals of the assessee are treated as allowed and all the appeals of the revenue are dismissed

ITA 2048/BANG/2019[2012-13]Status: DisposedITAT Bangalore30 Sept 2021AY 2012-13

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

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Ms. Neera Malhotra, D.R

…akes have happened prior to 31.3.2009. He submitted that the closing stock shown on 31.3.2009 shall become opening stock as on 1.4.2009. The Hon’ble Supreme Court has also reiterated this view in the case of V.K.J Builders and Contractors P Ltd vs. CIT (2009)(318 ITR 204). Hence the closing stock as on 31.3.2009 came to be overvalued by Rs.22.49 crores. Accordingly, while bringing the same in FY 2009-10, i.e., on 1.4.2009, the assessee has reduced the opening stock of raw materials and work in progress with the value of shortage of inventory and disclosed the same as an exceptional item in the Profit and Loss acc…

M/S. Bharath Fritz Werner Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 11(2), Bangalore

In the result, all the appeals of the assessee are treated as allowed and all the appeals of the revenue are dismissed

ITA 2047/BANG/2019[2011-12]Status: DisposedITAT Bangalore30 Sept 2021AY 2011-12

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

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Ms. Neera Malhotra, D.R

…akes have happened prior to 31.3.2009. He submitted that the closing stock shown on 31.3.2009 shall become opening stock as on 1.4.2009. The Hon’ble Supreme Court has also reiterated this view in the case of V.K.J Builders and Contractors P Ltd vs. CIT (2009)(318 ITR 204). Hence the closing stock as on 31.3.2009 came to be overvalued by Rs.22.49 crores. Accordingly, while bringing the same in FY 2009-10, i.e., on 1.4.2009, the assessee has reduced the opening stock of raw materials and work in progress with the value of shortage of inventory and disclosed the same as an exceptional item in the Profit and Loss acc…

M/S. Bharath Fritz Werner Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 11(2), Bangalore

In the result, all the appeals of the assessee are treated as allowed and all the appeals of the revenue are dismissed

ITA 2046/BANG/2019[2010-11]Status: DisposedITAT Bangalore30 Sept 2021AY 2010-11

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

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Ms. Neera Malhotra, D.R

…akes have happened prior to 31.3.2009. He submitted that the closing stock shown on 31.3.2009 shall become opening stock as on 1.4.2009. The Hon’ble Supreme Court has also reiterated this view in the case of V.K.J Builders and Contractors P Ltd vs. CIT (2009)(318 ITR 204). Hence the closing stock as on 31.3.2009 came to be overvalued by Rs.22.49 crores. Accordingly, while bringing the same in FY 2009-10, i.e., on 1.4.2009, the assessee has reduced the opening stock of raw materials and work in progress with the value of shortage of inventory and disclosed the same as an exceptional item in the Profit and Loss acc…

DCIT-2(1), Ujjain vs. Shri Santosh Agrawal, Ujjain

In the result, the appeal filed by the Revenue is dismissed

ITA 650/IND/2019[2007-08]Status: DisposedITAT Indore28 Jun 2021AY 2007-08

Bench: Shri Manish Borad& Ms. Madhumita Roy

For Appellant: Shri Harshit Bari, Sr. DRFor Respondent: Shri Girish Agrawal & Miss Nisha
Section 143(3)Section 263Section 44A

…-aside the issue to the file of the Ld. AO with a direction upon him to verify the claim of the assessee and to decide the matter keeping in view the decision of the Hon’ble Apex Court in the case of V.K.J. Builders & Contractor Pvt. Ltd. vs. CIT, reported in 318 ITR 204(SC). 5. It appears from the records that the detail of closing stock, purchases and sales were duly submitted before the Ld. AO during the course of proceeding under Section 143(3) r.w.s. 263 of the Act. It is the case of the DCIT vs. Shri Santosh Agrawal Asst.Year –2007-08 - 3 – assessee that the opening stock of the impugned year including th…

ACIT, Circle- 34(1), New Delhi vs. Madhur Jain, Delhi

In the result, the solitary ground of appeal of the learned AO is dismissed

ITA 176/DEL/2018[2013-14]Status: DisposedITAT Delhi27 May 2021AY 2013-14

Bench: Shri Amit Shukla & Shri Prashant Maharishi(Through Video Conferencing) Acit, Madhur Jain, Vs. Circle-34(1), C-2/4, Community Centre- New Delhi I, Ashok Vihar, Phase-Ii, New Delhi Pan: Agrpj0254C (Appellant) (Respondent)

For Appellant: Shri Gautam Jain, AdvFor Respondent: Shri S. S. Negi, Sr. DR
Section 142Section 143

…er, assessee preferred appeal before learned Commissioner of income tax (appeals) who deleted the above addition holding as Under:- ―10.13 I have gone through the ratio laid down in the above judgments. In the case of V.K.J. Builders and contractors Pvt. Ltd. 318 ITR 204 the Court has held that the closing stock of the earlier year has to form the opening stock of the next accounting year. In the case of Punjab State Warehousing Corporation, 324 ITR 406 it is held that once the revenue has accepted the closing stock it would automatically become the opening stock for the 4 subsequent Assessment year. In the case…

Bg Exploration & Production India Ltd., Mumbai vs. DCIT, International Taxation, Circle-1, Dehradun

In the result, the appeals filed by the assessee for assessment years 2013-14 and 2014-15 are allowed as discussed hereinabove

ITA 7477/DEL/2018[2014-15]Status: DisposedITAT Delhi03 Apr 2019AY 2014-15

Bench: Sh. N. S. Saini & Smt. Beena A. Pillaiita No. 7476/Del/2018 : Asstt. Year : 2013-14

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. Sanjay I. Bara, CIT DR
Section 143(3)

…k of the year preceding will also have to change and correspondingly the value of the opening stock of that year and so on.” 51. Reliance was also placed on the decisions of the Hon’ble Supreme Court in the case of VKJ Builders & Contractors P Limited v. CIT (318 ITR 204) wherein it has been held that it is the fundamental principle of accountancy that the figure of the closing stock of the earlier year has to form the opening stock of the next accounting year. To the same effect is the decision of the Hon'ble Bombay High Court in the case of CIT v. Corporation Bank Limited (174 ITR 616). 52. In view of the abov…

Bg Exploration & Production India Ltd., Mumbai vs. DCIT, International Taxation, Circle-1, Dehradun

In the result, the appeals filed by the assessee for assessment years 2013-14 and 2014-15 are allowed as discussed hereinabove

ITA 7476/DEL/2018[2013-14]Status: DisposedITAT Delhi03 Apr 2019AY 2013-14

Bench: Sh. N. S. Saini & Smt. Beena A. Pillaiita No. 7476/Del/2018 : Asstt. Year : 2013-14

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. Sanjay I. Bara, CIT DR
Section 143(3)

…k of the year preceding will also have to change and correspondingly the value of the opening stock of that year and so on.” 51. Reliance was also placed on the decisions of the Hon’ble Supreme Court in the case of VKJ Builders & Contractors P Limited v. CIT (318 ITR 204) wherein it has been held that it is the fundamental principle of accountancy that the figure of the closing stock of the earlier year has to form the opening stock of the next accounting year. To the same effect is the decision of the Hon'ble Bombay High Court in the case of CIT v. Corporation Bank Limited (174 ITR 616). 52. In view of the abov…

Udaylal H Jain, Mumbai vs. ACIT Cir 4, Thane

In the result, the appeal of the assessee is dismissed, subject to the above

ITA 530/MUM/2017[2010-11]Status: DisposedITAT Mumbai25 Mar 2019AY 2010-11

Bench: Shri G S Pannu, Vice- & Shri Pawan Singhassessment Year : 2010-11 Udaylal H Jain, Acit Circle 4, Shop No.7, Sainath Apartment, Thane Vs. Siddharth Hospital, Agashi Road, Virar (W) - 401303

For Appellant: Shri Bhupendra ShahFor Respondent: Shri Rajiv Gubgotra
Section 133ASection 143(3)

…erstood as the opening stock valuation in the subsequent period. The plea of the assessee on the point of law is also supported by the recent Shri Udaylal H Jain judgment of Hon’ble Supreme Court in the case of V K J Builders & Contracts Pvt. Ltd. vs. CIT 318 ITR 204. In this view of the matter, in conclusion, we hold that in view of the sustainability of the impugned additions, which results in corresponding enhancement in the value of the closing stock, the value of the opening stock in the next year be enhanced by the corresponding amount. 7. In the result, the appeal of the assessee is dismissed, subjec…

Trishul Shelters Pvt Ltd., Coimbatore vs. DCIT, Coimbatore

In the result, the appeal of the Revenue is allowed “

ITA 856/CHNY/2017[2012-2013]Status: DisposedITAT Chennai05 Feb 2018AY 2012-2013

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Shri. T. Banusekar, CA
Section 142ASection 144ASection 69Section 69C

…correct profit of the subsequent year. o This view that the corresponding adjustment in the opening stock of the subsequent year required to be made compulsorily was endorsed by the Hon. Supreme Court in the case of M/s. V K J Builders and Contractors P Ltd – 318 ITR 204 (2009) o In the instant case, the appellant had increased the value of the closing stock in the revised return instead of the Assessing Officer estimating the value of the closing stock in the assessment. o Applying the same principle enunciated by the Hon. Supreme Court mentioned above, when the value of the closing stock is increased, the openi…

ACIT, Coimbatore vs. M/S. Elgi Electric & Industries Ltd., Coimbatore

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

ITA 2362/CHNY/2016[2011-12]Status: DisposedITAT Chennai26 Jul 2017AY 2011-12

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Shri Pavuna Sundari, JCITFor Respondent: Shri Jagadisan, CA
Section 69

…Officer. For assessment year 2009-10 also, this tribunal in its order in ITA No. 303/Mds/2014 dated 30.04.2014 remitted back the issue to the AO to consider the judgement of Hon’ble Supreme Court in the case of VKJ Builders and Contractors P. Ltd., Vs CIT 318 ITR 204. In the appeal for assessment year 2010-11, this tribunal in its order in ITA No. 2591/Mds/2014 dated 20.03.2015 has held that the AO has not considered :-3-: I.T.A. N0. 2362/Mds/2016 the explanations given by the assessee in proper manner. The Ld. CIT(A) also has not considered the issue in detail. Therefore, it set aside the order passed by…

V.K.J Builders and Contractors P Ltd. v. CIT (318 ITR 204) — Cited in 24 Judgments | BharatTax