9911796707
TMI Blog2009 (1) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner of Income-Tax (Appeals) (CIT(A)). This appeal is admitted on the following substantial questions of law : (A) Whether on facts and in the circumstances of the case, the ITAT was justified in law in deleting the additions in respect of Sales Tax refund to the extent of Rs.9,00,813/-? (B) Whether the findings of the ITAT that Sales Tax refund should not be assessed as income till the litigation reaches finality is contrary to the provisions of Section 43 B of the IT Act 1961, since now deduction is based on actual payment basis and even if the Hon'ble Supreme Court gives decision against the assessee, the deduction would be admissible on actual payment basis? 2. The respondent-assessee-company is carrying on business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. The learned Counsel Shri Rivonkar for the appellant submitted that both the ITAT as well as CIT(A) have committed substantial error of law in holding that till the matter reaches finality in connection with the refund of amount, the amount, in question, cannot be added in the total income of the assessee. In this behalf, the learned Counsel for the appellant has relied upon a decision of the Supreme Court in the case of Polyflex (India) Pvt. Ltd., vs. Commissioner of Income-Tax, reported in 2002 ITR 343. It is also submitted that subsequently the refund order has already been passed in favour of the respondent-Company. It is submitted that it is not necessary for the Authority to wait for adding income in question till the decision re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot a relevant factor as the case would fall under the clause depending upon any action in respect of such expenditure. While considering the said question, the Supreme Court has observed thus : " We are inclined to think that in a case where a statutory levy in respect of goods dealt in by the assessee is discharged and subsequently the amount paid is refunded, it is the first clause that more appropriately applies. It will not be a case of benefit accruing to him on account of cessation or remission of trading liability. It will be a case which squarely falls under the earlier clause, namely, "obtained any amount in respect of such expenditure". In other words, where expenditure is actually incurred by reason of payment of duty on goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less the issue about refund is finally determined, the income received by the assessee cannot be considered in the total income of the assessee. Once an order is already passed in favour of the assessee for refund of the amount, we see no reason why the same should not have been treated as income received by the assessee for the relevant assessment year. The proceedings before the higher forum sometime may take years and unless there is an interim order in any manner by the appellate or higher forum, order passed by the concerned authority has to be given effect. Both the ITAT as well as the CIT(A) have committed an error of law in coming to the conclusion that unless the question about refund gets finality, the amount, in question, cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter to the ITAT to decide the question on merits as to whether such addition is justified or not. It is clarified that we have not examined merits as to such addition was justified or not and that question is kept open for consideration of the ITAT and the Tribunal may decide the same after hearing both sides. The impugned order is set aside to the extent that the ITAT was not justified in coming to the conclusion that since question of refund is subjudice, the income received by the assessee towards the refund could not have been added in the total income of the assessee for the relevant assessment year. We, accordingly, direct the ITAT to decide the matter afresh, in the light of what is stated hereinabove and decide the appeal de n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
