1994 (7) TMI 28 - HC - Income Tax

Appropriate Authority, High Court, Movable Property, Petition Against Order, Purchase Of Immovable Property By Central Government, Supreme Court, Writ Petition

Summary

Issues:
- Whether the Income-tax Appellate Tribunal was justified in upholding the decision of the Commissioner of Income-tax (Appeals) deleting a sum from the income of the assessee.

Analysis:
The case involved a question of law arising from an order of the Income-tax Appellate Tribunal regarding the assessment year 1981-82 under the Income-tax Act, 1961. The assessee, who operated a liquor shop, claimed losses due to the closure of the shop on certain dates as per government orders. The Income-tax Officer questioned the treatment of these losses as income. The Commissioner of Income-tax (Appeals) deleted the addition, and the matter was taken to the Income-tax Appellate Tribunal by the Revenue. The Tribunal noted that civil suits and a writ petition were filed by the assessee regarding the claimed losses, and the outcome was pending. The Tribunal observed that the claim for compensation had not been decided, and it would be premature to tax the entire claimed amount as income. The Tribunal referred to the definition of "total income" under the Income-tax Act, emphasizing that income must be ascertained and received to be taxed. Citing precedent, the Tribunal held that income can only be taxed upon final determination and receipt. Therefore, the Tribunal upheld the decision to delete the sum from the assessee's income.

The Tribunal directed the Income-tax Officer to determine the final figure within three months and tax it accordingly. The judgment was in favor of the assessee, and no costs were awarded. The decision highlighted the importance of the final determination and receipt of income before it can be subject to taxation. The Tribunal's reasoning was based on legal provisions and precedents, ensuring a fair and just outcome in the case.