STATE BANK OF INIDA vs COMMISSIONER OF INCOME TAX, ERNAKULAM

The Supreme Court upheld the decision of the High Court affirming that the excess amount credited to the assessee-Bank due to the devaluation of the Indian rupee constituted 'revenue receipts' under Section 5 of the Income Tax Act, 1961, and was thus chargeable to income tax. The Court clarified that such appreciation in value was incidental to the banking business and not a windfall. The judgment emphasized that accounting entries do not solely determine profit or loss, and the excess realization from foreign exchange was assessable income for the resident assessee.