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Commissioner Of Income-Tax vs International Combustion (I.) Pvt. ... on 24 March, 1982 cites

New Victoria Mills Co. Ltd vs Commissioner Of Income-Tax, U. P. on 20 March, 1965

6. It was also argued that as the assessee maintained its accounts on the mercantile basis, the liability for the price of goods purchased arose in the year in which the delivery of the goods was obtained. It was argued that in this case, the liability for the payment of the goods purchased arose in the accounting year ended on the 30th September, 1965, Therefore, the devaluation that took place on the 6th June, 1966, could not have any impact on that liability and the accounts of the earlier year could not be reopened or disturbed in order to include this liability. For this proposition reliance was placed on the decision of the Allahabad High Court in the case of New Victoria Mills Company Ltd. v. CIT [1952] 21 ITR 567, Pohoomal Brothers v. CIT [1965] 55 ITR 112 (Bom) and the judgment of the Supreme Court in the case of CIT v. A. Gajapathy Naidu .
Allahabad High Court Cites 8 - Cited by 37 - Full Document

The Commissioner Of Income-Tax, Madras vs A.Gajapathy Naidu on 16 April, 1964

6. It was also argued that as the assessee maintained its accounts on the mercantile basis, the liability for the price of goods purchased arose in the year in which the delivery of the goods was obtained. It was argued that in this case, the liability for the payment of the goods purchased arose in the accounting year ended on the 30th September, 1965, Therefore, the devaluation that took place on the 6th June, 1966, could not have any impact on that liability and the accounts of the earlier year could not be reopened or disturbed in order to include this liability. For this proposition reliance was placed on the decision of the Allahabad High Court in the case of New Victoria Mills Company Ltd. v. CIT [1952] 21 ITR 567, Pohoomal Brothers v. CIT [1965] 55 ITR 112 (Bom) and the judgment of the Supreme Court in the case of CIT v. A. Gajapathy Naidu .
Supreme Court of India Cites 12 - Cited by 173 - Full Document

Bestobell (India) Ltd. vs Commissioner Of Income-Tax on 18 September, 1978

10. The counsel for revenue placed strong reliance on the cases of Bestobell (India) Ltd. v. CIT , Union Carbide India Ltd. v. CIT and the judgment of the Supreme Court in the case of Sutlej Cotton Mills Ltd. v. CIT and contended that the outstanding liability on the date of the devaluation appearing in the books of account of the assessee was a loan or a deposit and appreciation of that liability would result in a loss of a capital nature. This argument, however, cannot be accepted in view of the clear finding of facts made by the Tribunal. The outstanding liability was on account of purchase of plants and machineries which were stock-in-trade of the assessee's business. There was an appreciation of that liability in the course of business. The business was conducted in foreign exchange and the loss arose directly from the business. The fact that the purchases were made in an earlier accounting year will not make any difference in this case. The liability was and remained a trading liability. In order to discharge that liability, the assessee, after devaluation, had to pay a larger amount in rupees. The additional liability arose not in the accounting year when the purchases of goods were effected but in the accounting year when the devaluation took place.
Calcutta High Court Cites 21 - Cited by 28 - Full Document

Union Carbide India Ltd. vs Commissioner Of Income-Tax on 28 April, 1980

10. The counsel for revenue placed strong reliance on the cases of Bestobell (India) Ltd. v. CIT , Union Carbide India Ltd. v. CIT and the judgment of the Supreme Court in the case of Sutlej Cotton Mills Ltd. v. CIT and contended that the outstanding liability on the date of the devaluation appearing in the books of account of the assessee was a loan or a deposit and appreciation of that liability would result in a loss of a capital nature. This argument, however, cannot be accepted in view of the clear finding of facts made by the Tribunal. The outstanding liability was on account of purchase of plants and machineries which were stock-in-trade of the assessee's business. There was an appreciation of that liability in the course of business. The business was conducted in foreign exchange and the loss arose directly from the business. The fact that the purchases were made in an earlier accounting year will not make any difference in this case. The liability was and remained a trading liability. In order to discharge that liability, the assessee, after devaluation, had to pay a larger amount in rupees. The additional liability arose not in the accounting year when the purchases of goods were effected but in the accounting year when the devaluation took place.
Calcutta High Court Cites 44 - Cited by 70 - S Mukharji - Full Document

Sutlej Cotton Mills Ltd vs Commr. Of Income Tax, West Bengal, ... on 27 September, 1978

10. The counsel for revenue placed strong reliance on the cases of Bestobell (India) Ltd. v. CIT , Union Carbide India Ltd. v. CIT and the judgment of the Supreme Court in the case of Sutlej Cotton Mills Ltd. v. CIT and contended that the outstanding liability on the date of the devaluation appearing in the books of account of the assessee was a loan or a deposit and appreciation of that liability would result in a loss of a capital nature. This argument, however, cannot be accepted in view of the clear finding of facts made by the Tribunal. The outstanding liability was on account of purchase of plants and machineries which were stock-in-trade of the assessee's business. There was an appreciation of that liability in the course of business. The business was conducted in foreign exchange and the loss arose directly from the business. The fact that the purchases were made in an earlier accounting year will not make any difference in this case. The liability was and remained a trading liability. In order to discharge that liability, the assessee, after devaluation, had to pay a larger amount in rupees. The additional liability arose not in the accounting year when the purchases of goods were effected but in the accounting year when the devaluation took place.
Supreme Court of India Cites 4 - Cited by 524 - P N Bhagwati - Full Document

Oil India Co. Ltd. vs Commissioner Of Income-Tax, ... on 17 December, 1980

13. A Division Bench of this court (Sabyasachi Mukharji and Sudhindra Mohan Guha JJ.) in the case of Oil India Co. Ltd. v. CIT [1982] 137 ITR 156 held in a judgment delivered on 17/18th December 1980, that in a case involving a foreign exchange transaction where the assessee had to incur a loss in order to carry on its business or to facilitate the carrying on of its business the additional liability due to devaluation would certainly be an expenditure or a liability to be allowed in computing the revenue profits.
Calcutta High Court Cites 26 - Cited by 18 - S Mukharji - Full Document
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