TMI Blog2014 (6) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... l Industries [2013 (10) TMI 324 - SUPREME COURT] - even if it was assumed that the assessee was entitled to the benefits under the advance licences as well as under the duty entitlement pass book, there was no corresponding liability on the customs authorities to pass on the benefit of duty free imports to the assessee until the goods were actually imported and made available for clearance - the benefits represent a hypothetical income which may or may not materialize and its money value is therefore not the income of the assessee - in fact no real income but only hypothetical income had accrued to the assessee and Section 28(iv) would be inapplicable. The Assessee has discontinued its manufacturing operations after 31.03.1995, surrender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f advance licence. Pursuant to the directions of Tribunal, A.O vide order dated 26.12.2008 passed under section 143(3) r.w.s 254 of the Act determined total income at Rs. 26,16,174/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) vide order dated 15.10.2009 upheld the order of A.O by holding as under:- 5.4 I have considered the facts and submissions of the ld. A.R. carefully. There is no dispute about the fact that the appellant is following mercantile system of accounting. Therefore, income is liable to be taxed on the basis of its accrual or arising during the relevant period. There is no dispute about the fact also that the appellant became entitled for the income of Rs. 62,88,891/- on account of Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective effect 1.4.1992. The Ld. A.R's claim that deduction u/s 80HHC shall be worked out after ignoring the loss determined in respect of exports is not valid after the insertion of the fifth Proviso in section 80HHC as referred to above. Therefore, under these circumstances the A.O has rightly worked out the deduction u/s 80HHC available to the appellant during the relevant period and no interference in the same is called for. 5.6 In view of the aforesaid discussion, all the four grounds of appeal are hereby rejected. 4. Aggrieved by the order of CIT(A), the Assessee is now in appeal before us and has raised the following grounds:- 1.On the facts and circumstances of the case and in law the learned CIT (A) has erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has not earned any profit in future on the sale of advance license. He also placed on record the copy of the submission made to the relevant authorities about the surrendering of licenses. He further placed reliance on the decision of Apex Court in the case of CIT vs. Excel Industries Ltd. (2013) 86 CCH 86. He also placed on record the copy of the aforesaid order. He thus submitted that in view of the decision of the Hon ble Apex Court in the case of Excel Industries, no addition can be. The ld. D.R. on the other hand relied on the order of CIT(A). 7. We have heard the rival submissions and perused the material on record. Before us the Assessee has submitted that as per the accounting system followed by it, it had accounted for the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome accrued to the assessee is real or hypothetical; whether there is a corresponding liability of the other party to pass on the benefits of duty free import to the assessee even without any imports having been made; and the probability or improbability of realisation of the benefits by the assessee considered from a realistic and practical point of view (the assessee may not have made imports), it was quite clear that in fact no real income but only hypothetical income had accrued to the. assessee and Section 28(iv) would be inapplicable to the facts and circumstances of the case. 8. Considering the fact that the Assessee has discontinued its manufacturing operations after 31.03.1995, surrendered the licenses to the appropriate auth ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
