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TMI Blog2011 (12) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal, the assessee-appellant has challenged correctness of CIT(A) s order dated 31st October, 2010, in the matter of assessment under section 143(3) of the Income tax Act, 1961, for the assessment year 2005-06 on the following grounds: 1. The ld CIT(A) erred in facts and in law and under the circumstances in erroneously confirming the sum of Rs.10 lakhs as income taxable under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need to be taken note of. The assessee is a franchise for providing computerized information. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had received a sum of Rs.10,00,000 from Indian Infochem Pvt. Ltd., on 16.6.2000 as advance against gross consideration of Rs.25,00,000 on termination of franchise. The Assessing Officer noticed that the said amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctrodes Equipments Ltd (1985) 155 ITR 78 (Bom) has recognized that the benefit of extinction of liability which had continued un-discharged is covered u/s.28(iv) of the I.T. Act. In protos Engineers Co Ltd vs. CIT (1995) 211 ITR 919 (Bom), it was held that advances against public supplies (unclaimed balances) received in earlier years had a close and direct nexus with the business and definitely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2001-02, and that nothing happened during the relevant previous year so as to provoke it s taxability u/s.28(iv). The year before us is neither the year of receipt nor a year in which any material development took place so as to alter the character of receipt. It is not the case of the revenue that liability has ceased in the relevant previous year, and, for the said reason, the amount became t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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