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TMI Blog2010 (8) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... rmitting the assessee to recover excess amount than the amount fixed by the government for levy sugar without any condition of refund etc., such receipt of these amounts would be treated as revenue receipt. - but excess price charged by the assessee, while the writ petition was still pending, would not be treated as a revenue receipt in the hands of the assessee company, in as much as, the excess receipt was contingent upon the success in the writ petition filed by the assessee. - part of the structure is also known as building. – assessee is entitled to take benefit of initial depreciation - 251 OF 1990 - - - Dated:- 26-8-2010 - A. K. SIKRI and Ms. REVA KHETRAPAL, JJ. Mr. Sanjeev Sabharwal, Advocate with Mr. Uppal Saha, Adv. Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Second question relates to the claim of the assessee for deduction under Section 80J of the Income Tax Act in respect of its new unit namely 10 ton Furnance Division and Steel Unit B‟. This case pertains to the assessment year 1976-77. Perusal of the order of the Assessing Officer would reveal that for the first time, claim under Section 80J of the Act was made by the assessee in the assessment year 1973-74. The assessee was denied that claim by the Assessing Officer. For this reason, the Assessing Officer denied the claim in this assessment year as well, taking note of the fact that the matter pertaining to 1973-74 was pending before the Income Tax Tribunal. 4. It is a matter of record that the appeal filed by the assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the price fixed by the government and in this manner calculated the excess amount of Rs. 1,02,037/-. The question is as to whether the receipt of this amount has to be treated as revenue receipt i.e. income at the hands of assessee or it has to be treated as contingent receipt which was the position taken by the assessee in the return filed by it. 6. The writ petition filed by the assessee was ultimately dismissed and the amount in question was refunded by the assessee alongwith the interest. Similar position, in the case of the assessee itself, had arisen in the assessment year 1975-76 also. In that year too, the Tribunal had decided the issue in favour of the assessee holding that the excess price charged by the assessee, while the writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Government and the price at which the sugar was actually sold by the respondent. It was also made clear that it would be open to the court to deal with the bank guarantee and pass order as to how the amount is to be distributed at the time of final orders in the writ petition. Keeping in view that it was a conditional order passed by the High Court in the writ petition challenging the fixation of the price levy sugar, the High Court opined that the interim order was not unconditional and as it was hedged with certain condition, the excess price charged would not be treated as revenue receipt/income at the hands of the assessee. 8. We may point out at this stage that the Supreme court in the case of K.C.P. Ltd. Vs. CIT, 245 ITR 421 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is clear from the facts stated by the High Courts that in each of the cases the assessee's right to realize the excess price was the subject matter of dispute pending in the High Court and the High Courts had passed different interim orders pursuant to which the respective assessees were collecting the excess price. Though the interim orders of the High Courts are differently worded in the three cases, one common feature of all the orders is that the realization of the excess price by the respective assessees was hedged by several conditions one of which was that the assessee shall refund the amount received in excess of the price fixed in the event of the pending dispute being decided adversely to the assessee by the court. Thus, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any condition of refund etc., such receipt of these amounts would be treated as revenue receipt. 11. On the other hand, where conditions are imposed and particularly the condition that this amount would be refunded in case the petitioner fails in the writ petition, the excess realization at the hands of the assessee is not to be treated as revenue receipt but contingent receipt. Thus we answer this question also in favour of the assessee and against the revenue. 12. Question no. 4 which relates to the initial depreciation under Section 32 (1) (iv) of the Act. The relevant portion of Section 32 (1) (iv) is reproduced hereunder:- "Section 32 Depreciation: (1) In respect of depreciation of buildings, machinery, plant or furniture owne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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