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2014 (11) TMI 58 - HC - Income TaxLiability to pay tax on surcharge levied for delayed payment - Whether surcharge for delayed payment reflected in the bills raised by the assessee and its accounts, would invite payment of a tax dehors recovery/payment/receipt of surcharge – Held that:- The amount was added by the AO as reflecting levy of surcharge on delayed payment of bills - this amount has neither been paid nor recovered by the assessee - the surcharge is a disputable item and may at any time be reduced or waived and, therefore, despite the fact that the assessee maintains a mercantile system of accounting - income tax is fundamentally a levy on income and though the Act may prescribe different points in time at which liability to taxation enures still remains a tax on receipt of income - A hypothetical income that may or may not materialise should not be made subject matter of tax merely because of an entry in the accounts books maintained by an assessee - in Commissioner of Income-tax Vs. Shoorji Vallabhdas and Co.[1962 (3) TMI 6 - SUPREME Court] it has been held that where the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account – thus, the order of the Tribunal is upheld – Decided against revenue.
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