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2023 (7) TMI 847 - ITAT RAIPURRevision u/s 263 by CIT(A) - accrual of income - service charges receivable from the State Government were not accounted for in its returned income - HELD THAT:- Admittedly, it is a settled position of law that as per the real income theory, it is the real income alone which is liable to be brought to tax in the hands of the assessee and no taxes can be levied on a hypothetical income, but we are unable to persuade ourselves to subscribe to the contention of the Ld. AR that the said theory would apply to the facts involved in the present case before us. We, say so, with all the conviction for the reason that there is no denying of the fact as had been reported by the assessee's CA in his audit report that income in the form of service charges had accrued to the assessee bank during the year under consideration for the services which were rendered by it to various co-operative societies for purchase of paddy. Now when the aforesaid income had accrued to the assessee in definite terms, therefore, there was no justification for it to have kept the recognizing of the same in abeyance. One can well understand that in case if the loss in question was inextricably interlinked or interwoven with the event leading to generation of the income that had accrued in the hands of the assessee bank, i.e. service charges on procurement of paddy by the assessee on behalf of various co-operative societies and the liability for the same had arisen during the year under consideration, then, the same had to be considered in light of the real income theory as had been propounded by the various Courts, but we are afraid that the facts involved in the present case do not fall within the scope and gamut of any such situation. Once it is established that the commissions were receivable to the bank, then, we are unable to fathom any basis for the assessee bank to claim that the said income was not liable to be brought to tax in its hands during the year in which the same had accrued. We, thus, considering the facts involved in the case before us are unable to persuade ourselves to subscribe to the view taken by the CIT(A), who had dislodged the well-reasoned order of the AO and thus, set-aside his order and uphold the addition that was made by the A.O while framing the assessment vide his order passed u/s.143(3) r.w.s.263. Appeal filed by the revenue is allowed.
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