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2022 (5) TMI 93 - AT - Income TaxAccrual of income - deduction on account of Special Additional Duty (SAD) receipts in its computation of income - treating the Special Additional Duty [payment of custom duty] as income of the assessee on receipt basis - whether the receipts were in the nature of contingent receipt and actually the assessee has offered for taxation in subsequent year, as and when actually sanctioned by the Customs Department and received by the assessee? - HELD THAT:- As noted that the claim of assessee seems reasonable but the claim is subject to verification. As decided in M/S EXCEL INDUSTRIES LTD. AND MAFATLAL INDUSTRIES P. LTD. [2013 (10) TMI 324 - SUPREME COURT] that income accrues when it becomes due but it must also accompanied by a corresponding liability of the other party to pay the amount. Further held that, only then it can be said that for the purpose of taxability that income was hypothetical and it had really accrued to the assessee. As in the present case, the subject verification of SAD receipts whether approved by customs authorities and when it was approved, the income accrued in that year only. This is a matter of verification by the AO. Even the AO will verify whether the assessee in subsequent year has declared the corresponding income or not. As the issue is clear that income will accrue when the corresponding liability of the other party to pay the amount and on this principle we remand the matter back to the file of the AO for verification. The appeal of the assessee is allowed subject to verification of facts.
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