TMI Blog2014 (4) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee - the credit of pro forma rebate taken into account is illusory and no real income had accrued - This was a finding of fact which has not been challenged by the Revenue in the sense that the finding is perverse nor is the finding of the Tribunal was demonstrated by Mr. Dutta, learned advocate for the appellant to be erroneous either in fact or in law. If the assessee had in fact received the money, it would have been a receipt in the nature of revenue but the fact is that the assessee did not receive any money - That is the finding of the Tribunal - The receipt shown in the profit and loss account is an illusory receipt - The assessee had communicated its reasons as to why it resorted to make to such an illusory entry which incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods, in which the inputs were used and other relevant conditions were fulfilled, the benefit by way of credit does not accrue to the assessee and, further, if there was and that too to the extent of the amount of liability and the balance amount of the accumulated credit would either to be carried over or would lapse. The pro forma credit available to the assessee operated in the filed quantification of liability by way of deduction and it had nothing to do with the character of income. We find that the issue in both the appeals is squarely covered with the order of the Tribunal in the assessee's own case in I. T. A, BI, 1466/Cal/1996 of the assessment year 1992-93 dated June 12, 1997, respectively, such following the said order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit does not accrue to the assessee. If there is liability it will get adjusted against the pro forma rebate to the extent of the liability. Thus, the right to realise the rebate is dependent upon the accrual of liability, like the right of rebate under section 88 of the Income-tax Act. One can say that grant of rebate is so integral part that it operates in the field of calculation and quantification of the liability and, therefore, the right becomes contingent and operates in the field of deductions rather than in the field of income. The entry passed by the assessee in the books of account is superfluous. On reading the various other notes and the financial data stated in the audited accounts it appears to us that the entry was passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he converse is not true and mere posting of an entry would not always be conclusive evidence on the question of accrual. It would be worthwhile to see what the Supreme Court in [1961] 41 ITR 495 (SC) in the case of Delhi Stock Exchange Association Ltd. v. CIT had to say. The judgment laid down that the treatment given to a transaction by an assessee in the books of account or his profit and loss account is not decisive of the nature of the transaction. In [1956] 29 ITR 515 (Mad) in the case of K. S. Narayanaswami Iyer v. CIT it was held that accountancy cannot set at naught the general principles concerning the computation of profit which belonged to the substantive law. It is incorrect in this case to say that neither the assessee nor the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the report (page 267) : The Madhya Pradesh High Court in the case of CIT v. Dusad Industries [1986] 162 ITR 784 (MP), dealt with a case where the Government had framed a scheme for granting sales tax subsidies to industries set up in backward areas. The High Court was of the view that the object of the scheme was not to supplement the profits made by industries. In that view of the matter, the High Court held that the subsidies given under the said scheme by the Government to newly set up industries were capital receipts in the hands of the industries and could not be taxed as revenue receipts. In that case, 75 per cent. of the sales tax paid in a year for a period of five years from the date of starting of production was t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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