HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Calcutta Company Ltd. v. Commissioner of Income-tax, West Bengal
Civil Appeal No. 213 of 1955
[1960] 1 SCR 185 ·
Indian Income-tax Act, 1922, sections 10(1), 10(2)(xv)
Sources & disclosures includedDownload original judgment / order
3-judge bench · S. R. Das · N. H. Bhagwati · M. Hidayatullah
Assessment years: 1948–49
01 · Facts of the case
Land developer on mercantile accounts credited full sale price Rs 43,692-11-9 although only Rs 29,392-11-9 was received. Sale deeds imposed unconditional development obligations; estimated Rs 24,809 liability was debited before actual spending and disallowed below.
Source: Primary report: SCR 186–190
02 · Discussion by the Hon’ble Court
Unconditional sale-deed obligations accrued at sale; future discharge and estimation uncertainty did not make them contingent. Authorities could scrutinize estimate. Section 10(2) deductions were not exhaustive: commercial profit under 10(1) required deducting incidental business liabilities absent statutory prohibition.
Source: Primary report: SCR 190–199
03 · Judicial decision
Estimated accrued development liability was deductible under section 10(1); Court did not need to decide alternative interpretation of expenditure under 10(2)(xv).
Source: Primary report: SCR 198–199
04 · Outcome / in whose favour
Appeal allowed; High Court judgment set aside; referred deduction question answered affirmatively; Revenue to pay costs throughout.
Source: Primary report: SCR 199–200
05 · AKHB REVIEW POINT
Identify enforceable accrued liability and substantiate estimate; this is not permission to deduct every future-cost reserve. Check later statutory/accounting rules separately.
Source: Primary report: SCR 191–194, 199
Source & verification
Download original judgment / order · Open cited source rendition
Complete 16-page Supreme Court Reports scan. Any adjoining report fragments remain in the unchanged original and are excluded from this analysis.
Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
Source checked 2026-10-23. Subsequent treatment and present-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 uses AI assistance and a preserved full-primary review, with refreshed exact original-byte verification. 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. AKHB REVIEW POINT is editorial analysis, not the Court’s holding.