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TMI Blog2006 (7) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... or the year 1980 or so cannot be sustained. – question is answered in favour of the Revenue and against the assessee - appeal is therefore allowed - order of the Commissioner (Appeals) and that of the Tribunal are set aside - - - - - Dated:- 7-7-2006 - Judge(s) : K. S. RADHAKRISHNAN., V. RAMKUMAR. JUDGMENT The judgment of the court was delivered by K. S. RADHAKRISHNAN J.-This appeal is preferred by the Commissioner of Income-tax, Cochin under section 260A of the Income-tax Act, 1961, against the order of the Tribunal, Cocmn Bench in I.T.A. No. 935/Coch/1991 dated October 16, 2000. The following questions of law are raised for consideration: "1. Whether, on the facts and in the circumstances of the case, the amount of Rs. 55,28,862 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in K. V. Moosa Koya and Co. v. ITO [1989] 175 ITR 120 and the decision of the apex court in CIT v. Hindustan Housing and Land Development Trust Ltd. [1986] 161 ITR 524 held that the actual cessation or remission of liability under section 41(1) took place in the assessee's case only when the appeal by the Excise Department was withdrawn as per the Supreme Court's order dated July 26, 1998, and therefore, countervailing duty refund cannot be included as income of the year. The Revenue aggrieved by the said order took up the matter in appeal before the Tribunal. The Tribunal dismissed the appeal concurring with the view of the Commissioner (Appeals), against which this appeal has been preferred. The assessee had during the year 1986-87 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Polyflex (India) P. Ltd. v. CIT [2002] 257 ITR 343. A Bench of the Supreme Court specifically considered the scope of section 41(1) of the Income-tax Act, 1961, and held that where a statutory levy is discharged by the assessee and subsequently the amount paid is refunded, it will be a case where the assessee "has obtained any amount in respect of such expenditure" within the meaning of section 41(1) of the Income-tax Act, 1961; it will not be a case of "benefit by way of remission or cessation" of a trading liability. The court held that where expenditure is actually incurred by reason of payment of duty on goods and the deduction or allowance is given in the assessment of an earlier period, the assessee is liable to disgorge that benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income, the refund of the amount is taxable as a revenue receipt under the provisions of section 41(1) of the Income-tax Act. The facts would show that the assessee had actually received the refund and had accounted the same. Merely because the Revenue had filed an appeal before the apex court, which was later withdrawn, did not mean that the refund had not actually accrued to the assessee. In fact, it accrued to the assessee and had actually received it, and hence the amount is assessable under section 41(1) of the Income-tax Act. The Tribunal in our view had erred in not treating the refund as cash obtained of an expenditure allowed in prior years. The Tribunal's finding that the refund relates to an amount paid by the assessee out o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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