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Sir Kikabhai Premchand vs Commissioner Of Income Tax ... on 9 October, 1953

" 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 profits to the assessee which he has not actually received. In fact such a notional imaginary profit cannot be taxed. It is a well settled principle as held in Sir Kikabhai Premchand v. CIT [1953] 24 ITR 506 (SC) the Constitution Bench judgment that the firm cannot make a profit out of itself. The transaction which is not business transaction and does not derive immediate pecuniary gain is not subjected to tax. In the present case by showing the market value of the closing stock the assessee has earned potential profit out of itself in as much as the stock-in-trade remained with the assessee at the closing of the accounting year.
Supreme Court of India Cites 2 - Cited by 164 - V Bose - Full Document

Commissioner Of Income-Tax, West ... vs Hind Construction Ltd. on 6 September, 1971

The ratio of decision in the case of M/s. Orchid Griha Nirman Pvt. Ltd. supra is applicable to the facts of this case on all fours, inasmuch as the facts of both the cases emanate from the same transaction. We, therefore, while respectfully following the established judicial reasoning referred to above, hold that the facts of the case do not warrant any interference with the impugned order of the learned CIT(Appeals) on the aspect of proceedings under section 147 of the Act, and accordingly, uphold the same. Ground No 1 of the Revenue stands dismissed.
Supreme Court of India Cites 1 - Cited by 63 - K S Hegde - Full Document

Chainrup Sampatram vs Commissioner Of Income-Tax,West ... on 9 October, 1953

Secondly, putting the stock at the market value does not and cannot bring in any real profit which is necessary for taxing the income under the Act as is held in Chainrup Sampatram v. CIT [1953] 24 ITR 481 (SC) and CIT v. Hind Construction Ltd [1972 ] 83 ITR 211 (SC). Thirdly, it is a settled principle of income-tax law that it is the real income, which is taxable under the Act. This proposition was enunciated in CITv. Birla Gwalior (P.)
Supreme Court of India Cites 8 - Cited by 357 - M P Sastri - Full Document
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