TMI Blog2013 (11) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... te. Moreover, the assessee has admittedly stopped export business and is in the business of advisory as well as in share dealing. It is not in dispute that the said amount is shown as advance in the balance sheet of the assessee. The said liability is also shown as on 31.3.2007. Therefore the liability has been acknowledged by the assessee. Since amount has not been written off by the assessee in its books of account, it cannot be said that the liability has ceased to exists - Hon'ble Madras High Court has held in the case of CIT Vs. Tamilnadu Warehousing Corporation [2006 (10) TMI 118 - MADRAS High Court] that the amount representing liabilities which were shown year after year could not be added back u/s. 41(1) of the Act, 1961 – Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s could not be made as the required goods could not be identified and balance is still due and payable as on 31.1.2007. The assessee also filed a confirmation from the party before the Assessing Officer. 4. The Assessing Officer has stated that the assessee has not made any export in lieu of advance received even after ten years of receipt of advance He has submitted that the assessee was no longer required to carry out export in lieu of advance, nor was the amount repaid till date. The Assessing Officer has stated that as per FEMA Notification No. 23/RB-2000 dated 3.5.2000 and as per Regulation 16, inter-alia the assessee is required to ensure that the shipment of goods is made within one year from the date of receipt of advance payment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to Rs. 3,04,38,400/- is treated as cessation of liability and taxed as income u/s. 41(1) of the Act and added back to the total income of the assessee. In this regard, the Assessing Officer placed reliance on the decision of Hon'ble Bombay High Court in the case of Solid Containers Ltd. Vs. DCIT (308 ITR 417). Being aggrieved, the assessee filed the appeal before learned CIT(A). 5. Learned CIT(A) has stated that he has examined the details of the case. He has stated that the assessee had shown to receive Rs. 3,04,38,400/- from M/s. Amas Mauritius Ltd., a company registered in Mauritius on 24.1.1997 for the purpose of export of goods. However, no export has been made by the assessee against advance received. That the assessee has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) read with section 28(iv) of the Act. Hence this appeal by the assessee. 6. At the time of hearing, learned AR besides making submissions as made before the authorities below submitted that the liability to refund the said amount still exists in the books of account of the assessee and the same has not been written off. Therefore it cannot be added as income of the assessee u/s. 41(1) or u/s. 28(iv) of the Act as it has not become money of the assessee because of efflux of time. Learned AR submitted that a letter written to RBI vide letter dated 27.12.2011 for refund of the said amount without interest or exchange difference and the approval of RBI is awaited. Learned AR filed a copy of the said letter to substantiate its submission. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred by learned AR (supra). It is a fact that the assessee received a sum of Rs. 3,04,38,400/- from M/s. Amas Mauritius Ltd. on 24.1.1997 as an advance for the purpose of export of goods and the same has been appearing in the books of account of the assessee till date. It is also fact that the assessee neither has made export against the said advance nor the amount has been returned till date. Moreover, the assessee has admittedly stopped export business and is in the business of advisory as well as in share dealing. It is not in dispute that the said amount is shown as advance in the balance sheet of the assessee. The said liability is also shown as on 31.3.2007. Therefore the liability has been acknowledged by the assessee. Since amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount, we are of the considered view that the provisions of section 28(iv) which provides value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession shall be chargeable to Income Tax under the head "profit and gains of business or profession" could not be applied as the said benefit has not arisen to the assessee because the assessee is showing the said amount as its liability in the balance-sheet year after year. Therefore, we are of the considered view that the said amount cannot be added as income of the assessee u/s. 28(iv) of the Act. 9. We may also state that on and identical facts similar issue has also been considered by the ITAT, Mumbai Bench in the case of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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