TMI Blog1997 (4) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... For that in view of the facts and in the circumstances and the Central Excise Department having not accepted the order of the Assistant Collector determining the refund and having disputed the same before Collector (Appeals), the said sum of Rs. 12,01,757 could not be treated as income of your petitioner during the previous year relevant to the assessment year- 1991-92 and could not be included into the total income of your petitioner during the assessment year 1991-92 and in view of the facts and in the circumstances it may kindly be held accordingly." 2. Briefly stated, the relevant facts of the case are that the Assessing Officer found from the Notes and Accounts annexed with the Balance Sheet that during the year under consideration the assessee received a sum of Rs. 12,01,757 from Central Excise Department. This amount was reflected as a liability in Schedule 8 of the accounts under the head "current liabilities". The management of the assessee-company decided to treat the amount as a liability as the Central Excise Department preferred an appeal against the refund to the assessee-company. The Assessing Officer noticed that the factual position regarding this sum was that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment did not accept the order of the Assistant Collector who granted the refund and had already preferred an appeal on 5-3-1990 before the Collector (Appeals) against the order of the Asstt. Collector and as such the appeal being still pending the matter regarding refund had not become final and hence the same could not be treated as income for the assessment year 1991-92, The assessee placed reliance on the following decisions in support of its case : (1) CIT v. Hindustan Housing Land Development Trust Ltd. [1986] 161 ITR 524 (SC). (2) CIT v. Seksaria Vishwan Sugar Factory 96 ITR 36 (Bom.) (sic). (3) K. V. Moosa Koya Co. v. ITO [1989] 175 ITR 120 (Ker.). (4) Asstt. CIT v. Upper Ganges Sugar Industries Ltd. [1992] 40 ITD 614 (Cal.). (5) J.K. Synthetics Ltd. v. O.S. Bajpai, ITO [1976] 105 ITR 864 (All.). In view of these facts and circumstances and the decisions cited, the assessee contended before the CIT(A) that since the refund was disputed one and the appeal was still pending, the matter had not become final and, therefore, no income can be said to have accrued or arisen during the year ending 31-3-1991, relevant to the assessment year 1991-92 under appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aching finality. In order to prove his contention, the ld. counsel for the assessee invited our attention to the Schedule to the Accounts at page 10 of the Paper-Book wherein the refund under consideration has been shown as liability. According to him, this liability still exists and is not ceased. To support his arguments and contentions, the ld. counsel for the assessee relied on the following case laws: (1) Union of India v. J.Y. Synthetics Ltd. [1993] 199 ITR 14(SC). (2) J.K. Synthetics Ltd.'s case at page 880. 7. The ld. Departmental Representative, on the other hand, vehemently argued and strongly supported the impugned order of the CIT(A). According to him, the provisions of section 41(1) have rightly been applied by the departmental authorities as it is admitted fact that the liability for excise duty was claimed and allowed in the past and a part of the same was received during the previous year, relevant to the assessment year under consideration. He read out the last portion of CIT(A)'s order to support his contention and urged that the CIT(A)'s order should be upheld. 8. We have carefully considered the rival contentions, relevant facts and the material on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Satyanarayana Prosad v. Diana Engineering Co. and the Oudh Chief Court in Girija Dat Singh v. Gangotri Dat Singh." 9. The Hon'ble Gujarat High Court has also examined a similar matter about the claim for refund in the case of CIT v. Bharat Iron Steel Industries [1993] 199 ITR 67 (FB) wherein it was observed that for considering the taxability of an amount coming within the mischief of section 41 of the Act the system of accounting followed by the assessee was of no relevance or consequence. In that case certain amount had been refunded to the assessee during the pendency of the review or revisional proceedings. Since the assessee's claim for refund of the excise duty was in jeopardy and there was no final decision on the question the assessee was not entitled to claim the refund of excise duty. The assessee became finally entitled to claim the refund after the review or revisional proceedings were dropped. On these facts and circumstances of the case, the Hon'ble Gujarat High Court held as under: " ...that, in view of the pendency of the review or revisional proceedings, the assessee's claim for refund of the excise duty was in jeopardy. In other words, there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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