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TMI Blog2017 (3) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... t / income in the year under consideration. See Commissioner of Income Tax Versus M/s Excel Industries Ltd. and Mafatlal Industries P. Ltd. [2013 (10) TMI 324 - SUPREME COURT ] - Decided in favour of assessee. - TAX APPEAL NO. 141 of 2017 - - - Dated:- 2-3-2017 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE APPELLANT : MR SUDHIR M MEHTA, ADVOCATE FOR THE OPPONENT : MR SN SOPARKAR, SR. ADVOCATE with MR BS SOPARKAR, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] Feeling aggrieved and dissatisfied with the impugned judgment and order dated 18.03.2016 passed by the learned Income Tax Appellate Tribunal, Ahmedabad (hereinafter referred to as Tribunal ) in ITA No.538/Ahd/2013 for AY 200910, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and therefore, the same cannot be included in the year consideration. The learned Tribunal in an appeal preferred by the Revenue has confirmed the said order passed by the learned CIT(A) by specifically observing that as the carbon receipts were neither sold / transferred during the year under consideration and therefore, the same cannot be included in the income of the assessee in the year under consideration. [3.1] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal, the Revenue has preferred the present appeal to consider the above recast proposed question of law. [4.0] We have heard Shri Sudhir Mehta, learned Counsel appearing on behalf of the Revenue and Shri S.N. Soparkar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utilized by the assessee or in the year of receipts. While considering the aforesaid question, in paras 13 to 27, the Hon ble Supreme Court has observed and held as under: 13. The Revenue then preferred an appeal under Section 260A of the Act in respect of the following substantial question of law: Whether on facts and in circumstances of the case and in law ITAT is justified in law in holding by following its decision in the case of Jamshri Ranjitsinghji Spinning Weaving Mills Ltd. (41 ITD 142), that advance license benefit and DEPB benefits are taxable in the year in which these are actually utilized by the assessee and not in the year of receipts. 14. By the impugned order, the High Court declined to admit the appeal filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account. 18. The above passage was cited with approval in Morvi Industries Ltd. vs. Commissioner of Incometax (Central), [1971] 82 ITR 835 (SC) in which this Court also considered the dictionary meaning of the word accrue and held that income can be said to accrue when it becomes due. It was then observed that: ........ the date of payment ....... does not affect the accrual of income. The moment the income accrues, the assessee gets ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly due and that income could not be said to have accrued when it is based on a mere claim not backed by any legal or contractual right to receive the amount at a subsequent date. The High Court however held on the facts of the case that the assessee had a legal right to recover the consumption charge in dispute at the enhanced rate from the consumers. 24. This Court did not accept the view taken by the High Court on facts. Reference was made in this context to Commissioner of Income Tax vs. Birla Gwalior (P.) Ltd., [1973] 89 ITR 266 (SC) wherein it was held, after referring to Morvi Industries that real accrual of income and not a hypothetical accrual of income ought to be taken into consideration. For a similar conclusion, reference wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but one has to look at things from a practical point of view. (See R.B. Jodha Mal Kuthiala vs. Commissioner of Income Tax, [1971] 82 ITR 570 (SC)). This Court took the view that the probability or improbability of realisation has to be considered in a realistic manner and it was held that there was no real accrual of income to the assessee in respect of the disputed enhanced charges for supply of electricity. The decision of the High Court was, accordingly, set aside. 27. Applying the three tests laid down by various decisions of this Court, namely, whether the income accrued to the assessee is real or hypothetical; whether there is a corresponding liability of the other party to pass on the benefits of duty free import to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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