HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Chainrup Sampatram v Commissioner of Income-tax, West Bengal
Civil Appeal No. 142 of 1952
[1954] SCR 211 ·
Indian Income-tax Act, 1922, sections 4(1)(b) and 14(2)(c)
Sources & disclosures includedDownload original judgment / order
5-judge bench · Patanjali Sastri CJI (author) · S. R. Das J. · Vivian Bose J. · Ghulam Hasan J. · N. H. Bhagwati J.
Assessment years: 1942–43
01 · Facts of the case
A Calcutta bullion firm moved 582 silver bars to Bikaner for safety and claimed a sale to partners. Tax authorities rejected the sale and retained the bars in closing stock. The firm argued the disputed profit accrued in Bikaner and was exempt.
Source: Primary report: SCR 213–214
02 · Discussion by the Hon’ble Court
Did physical location or valuation of closing stock make the disputed profit accrue in Bikaner rather than where the business operated? Stock valuation balances the cost of unsold goods in determining realised trading results; it is not itself a source of profit. The Court explained the lower-of-cost-or-market rule and the distinction between anticipated loss and unrealised appreciation. The reference, however, assumed the disputed figure was correctly computed and raised only territorial assessability. No business was transacted in Bikaner; profits of this business accrued at Calcutta.
03 · Judicial decision
The appeal was dismissed with costs; the affirmative reference answer stood, on different reasoning from the High Court.
Source: Primary report: SCR 218
04 · Outcome / in whose favour
Revenue. The appeal was dismissed with costs; the affirmative reference answer stood, on different reasoning from the High Court.
Source: Primary report: SCR 218
05 · AKHB REVIEW POINT
Keep valuation principles separate from the precise question referred. This ruling does not approve taxation of unrealised appreciation: the computation basis was expressly outside the reference.
Source: Primary report: SCR 217–218
Source & verification
Download original judgment / order · Open cited source rendition
Eight pages / SCR 211–218. Opening first page contains Century Spinning ending; target begins at Chainrup caption.
Statutory scope
Historical statutory text and assessment period only. Present statutory equivalence and later judicial treatment are not cleared.
Later treatment
Source checked 2026-10-19. Subsequent treatment and current-law applicability have not been comprehensively checked.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from an identified primary report. Independent human review is not represented.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court’s holding. No current-law clearance is claimed.