9911796707
TMI Blog2002 (12) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... court was delivered by G. SIVARAJAN J.-These income-tax references arise out of a common order of the Income-tax Appellate Tribunal, Cochin Bench, in I.T A. Nos. 914, 915,916 and 917 (Coch) of 1994, 290 and 291 (Coch) of 1996 filed by the Kerala Urban Development Finance Corporation, Calicut, in respect of the assessment years 1989-90, 1990-91, 1991-92, 1992-93, 1993-94 and 1994-95. At the instance of the assessee-Corporation the Tribunal has referred the following common question of law for the decision of this court: "Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the HUDCO administration service charges collected and retained by the assessee at the time of disbu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loan sanctioned and disbursed to the various local bodies for over a period from 36 to 44 months and therefore the assessee used to spread over this amount for the entire loan repayment period which was the practice followed from the inception. This was not accepted by the Assessing Officer on the ground that since the entire A S charges were deducted at the time of disbursal of the loan itself, the same has to be treated as income of the assessee of the year of receipt itself. He accordingly included the entire A S charges deducted from the loans disbursed to the municipalities and local bodies. In other words, the Assessing Officer did not accept the spread over method adopted by the assessee. This was confirmed by both the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91-92 and for the other years by way of original assessment the Department has taken the present stand, viz., the method of accounting followed by the assessee is not acceptable. Counsel further submits that the Department should have allowed the assessee to continue the same practice which was being followed from the very beginning at least for consistency sake. Learned counsel also took us to the decision of the Supreme Court in E.D. Sassoon and Co. Ltd. v. CIT [1954] 26 TIR 27 as also the decisions in CIT v. ChuniIal V. Mehta and Sons P. Ltd. [1971] 82 ITR 54 (SC) and Madras Industrial Investment Corporation Ltd. v. CIT [1997] 225 ITR 802 (SC) for the proposition that it is not the date of receipt of the income that is relevant for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsolutely no justification nor any legal principle involved in the matter of apportioning the commission received in the absence of any restriction or condition imposed under the agreement between the assessee and the HUDCO or between the assessee and the municipalities/local bodies. We have considered the rival submissions and also perused the orders of the authorities and the Tribunal. The assessee-company had received 3 per cent. A S charges from the loans which are sanctioned by HUDCO and disbursed to various municipalities/local bodies. The assessee had also deducted the entire 3 per cent. A S charges at the time of disbursal of the loan amount to the municipalities/local bodies in whose favour the loan is sanctioned. There were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must satisfy the requirement of the said statute. As observed by the Supreme Court in E.D. Sassoon and Co.'s case [1954] 26 ITR 27 mentioned above, the test is whether the assessee has got "a right to receive profits". It is in that context the Supreme Court has observed that if the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. In this case as observed by the first appellate authority both the right to receive the commission and the actual receipt occurred during the accounting period relating to the assessment years concerned. Therefore, there is no question of any contention being raised based on the method of accounting followed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
