TMI Blog2002 (8) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 22,964 out of the said miscellaneous expenditure was spent towards Vishwakarma Pooja and Rs. 3,710 was spent towards purchase of sweets for the Pooja. Relying on the decision of the Karnataka High Court in the case of Sangameshwara Coffee Estates Ltd. vs. State of Karnataka (1986) 55 CTR (Kar) 232 : (1986) 160 ITR 203 (Kar) the AO disallowed the amount. On appeal by the assessee the CIT(A) deleted the addition by relying on the decision of CIT(A) in the case of Hira Ferro Alloys Ltd. wherein a similar claim for deduction was allowed, the claim of the assessee was allowed and the addition was directed to be deleted. Aggrieved by the order of the CIT(A) the Revenue has preferred the present appeal. 4. The learned Departmental Representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, we dismiss this ground of the appeal of the Revenue." Respectfully following the earlier decision we hold that the CIT(A) was justified in deleting the addition and his order does not call for any interference and accordingly this ground of appeal of the Revenue is dismissed. 6. The 2nd Ground of appeal of the Revenue reads as follows: "On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 1,64,343 made by the AO on account of accrued interest on sticky loans." The AO noticed that in the notes on accounts there was a reference to interest that accrued but which had not been accounted for which according to the assessee will be accounted as and when received. The following were the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dded the sum of Rs. 1,64,343 to the total income of the assessee. 7. Aggrieved by the order of the AO the assessee preferred appeal before CIT(A). The CIT(A) relied on his order in the case of Saket Industrial Gases Ltd. for asst. yr. 1995-96 wherein a similar issue came up for consideration and the CIT(A) had deleted the addition made by the AO in that case. Following his order in the said case and finding that the facts of the present case were identical he directed the AO to delete the addition made. 8. Aggrieved by the order of CIT(A) the Revenue is in appeal before us. The learned Departmental Representative relied on the order of the AO and the learned counsel for the assessee relied on the order of the CIT(A). We have considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome: (1) It is the income which has really accrued or arisen to the assessee that is taxable. Whether the income has really accrued or arisen to the assessee must be judged in the light of the reality of the situation. (2) The concept of real income would apply where there has been a surrender of income which in theory may have accrued but in the reality of the situation, no income had resulted because the income did not really accrue. (3) Where a debt has become bad, deduction in compliance with the provisions of the Act should be claimed and allowed. (4) Where the Act applies, the concept of real income should not be so read as to defeat the provisions of the Act. (5) If there is any diversion of income at source under any sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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