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TMI Blog2024 (11) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... te of submission of claim that the accrual of cash incentive would be recognized and not from the date of submission or receipt of cash incentive. The reference is accordingly answered in favour of the assessee-respondent and against the Revenue. - HON BLE MR. JUSTICE SANJEEV PRAKASH SHARMA AND HON BLE MR. JUSTICE SANJAY VASHISTH Present: For the petitioner/Revenue : Mr. Ranvijay Singh, Sr. Standing Counsel. For the Respondent : None. SANJEEV PRAKASH SHARMA, J.(ORAL) 1. We find that notices on the respondent had been served, however, no one appears for the respondent. 2. This is a reference filed by the Commissioner of Income Tax, referred by the Income Tax Appellate Tribunal (ITAT), before this Court relating to question No. 1 alone. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income was concerned. The date of the export would not by itself give rise to an income unless the assessee laid a claim to receive the income from the Government. The date of the receipt of cash incentive would also be not relevant once it is found that the assessee was maintaining his accounts on the mercantile system. Therefore, the accrual of income would either depend on the date of the making of the export or on the date of the making of application by the assessee claiming cash incentive from the Government. The date of export would not create a right unless the assessee made a claim therefor. If the assessee did not file his claim, there was no accrual in his favour. 6. It is further asserted that the said decision of the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unted for the cash incentive on receipt basis even though it was following mercantile system of accounts and by so doing had short-disclosed an amount of Rs. 240,083/- as part of its income of the assessment year 1978-79. After referring to certain authorities, he held that as the assessee itself had been following the mercantile system of accounting in respect of the cash incentive an addition of Rs. 240,080/- was being made to the income returned by the assessee. The assessee challenged the decision of the ITO before the CIT (Appeals), who has dealt with it in paras 4 to 6 of his order. It was contended by the assessee before him that it had not changed the system of accounting from the mercantile system to cash, system but the dispute wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the amounts of cash incentive in dispute had not accrued as assessee's income in the assessment year 1978-79 According to him, the cash incentive amount will accrue on the date when the claim was sanctioned. He cited two decisions of Madras High Court, namely, CITI Tamil Nadu Vs Ashoka Lungi Co.-12 OITR 413 and CIT Tamil Nadu Vs Motor Credit Co. P.Ltd.-127 ITR 572. On behalf of the Revenue, it was submitted that cash incentive was allowed by the Government of India according to a duly formulated scheme announced before hand and, therefore, it accrued no sooner the assessee affected the necessary exports and the procedure for claiming that cash incentive merely related to the quantification of amount payable. Cases cited by the ITO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's contention. 5. We refer question No. 2 proposed by the Commissioner for the opinion of the Honourable High Court. 6. The statement of the case is finalised after due notices to the parties. 9. It appears that the said aspects were not brought to the knowledge of the Supreme Court, and therefore the Apex Court has made the aforesaid observations. 10. Be that as it may, with regard to assessment year 1979-80, we find that on facts, the Tribunal made following observations relating to cash incentives and it had remanded the matter to the IAC (Asstt.) for deciding it afresh on the basis approved by the Tribunal for the assessment year 1978-79. 5. The second objection of the Revenue is about the relief of Rs. 2,40,083/- given by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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