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TMI Blog2024 (6) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... s raised by the Revenue thus stands squarely answered. The Revenue s contention on addition of the said amount as the assessee s income needs to be rejected. Taxability of benefits on account of DEPB License/Focus Market Licenses - HELD THAT:- The question is squarely covered by the decision of Excel Industries Ltd. [ 2013 (10) TMI 324 - SUPREME COURT] Our attention is drawn to the contentions of the parties as also the observations as made by the Supreme Court wherein in similar circumstances, the Supreme Court has held that even if it is assumed that the assessee therein was entitled to the benefits under the advance licences, as well as under the duty entitlement passbook, there was no corresponding liability on the Customs authorities t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 5 April 2017 passed by the Income Tax Appellate Tribunal (for short the Tribunal ) whereby the Respondent s/ assessee s appeal was allowed. 2. The issue which had fallen for consideration of the Tribunal was the taxability in the event the assessee makes pre-payment of a sales tax liability at discounted value. 3. In such context, the Tribunal while allowing the assessee s appeal, following the decision of the Special Bench of the tribunal in the case Sulzer India Ltd. Vs. Jt. CIT. 138 ITD 137 observed that the issue was required to be decided in favour of the assessee. The relevant observations of the Tribunal allowing the assessee s appeal are required to be noted, and read thus:- 5. We find that the CIT-LTU had invoked the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stands before the AO. So, reversing the order of the CIT, we decide the effective Ground of appeal in favour of the assessee. As we have decided case on merits, we are not adjudicating the ground raised by assessee about validity of revisionary proceedings. As a result appeal filed by assessee stands allowed. (emphasis added) 4. In the present appeal, the Revenue has raised the following questions of law.:- a) Whether, on the facts and in the circumstances of the case and in law, the ITAT was right in allowing the claim of the assessee of an amount of Rs. 15.23 crores, being the amount saved on account of prepaid sales taxes as capital receipts. b) Whether, on the facts and in the circumstances of the case and in law, the ITAT was right i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h finding of the High Court was upheld by the Supreme Court. 6. The facts in the present case are not different. The assessee in the present case saved an amount of Rs. 15.23 crores on account of pre-paid sales tax. Such amount was sought to be taxed by the assessing officer as revenue receipt. Thus, as held by the Supreme Court in Balkrishna s case (supra), such amount was required to be treated as a capital receipt. The first question of law as raised by the Revenue thus stands squarely answered. The Revenue s contention on addition of the said amount as the assessee s income needs to be rejected. 7. Insofar as the second question of law is concerned, as stated on behalf of the parties, the question is squarely covered by the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO had also not made any inquiries. In the detailed discussion on this aspect the Tribunal has observed that insurance clam was lodged for the goods lost in transit. The assessee at that time had merely filed a claim with the insurance company. This claim had not been approved as the insurance company had neither accepted the same nor given any assurance for making payment. Therefore, no income had accrued which could be taxed. The Tribunal rightly held that ordinarily the income is said to have accrued to a person when he acquires the right to income and this should be enforceable right, though actual quantification or receipt may follow in due course. The mere claim to income without any enforceable right cannot be regarded as an accru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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