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THE LIQUIDATOR POLYMERLAND INDIA P. LTD. Versus THE DEPUTY COMMISSIONER OF INCOME TAX

2015 (5) TMI 791 - DELHI HIGH COURT

Deemed accrual of interest - Tribunal held that the interest had accrued to the assessee and hence was assessable to tax in the hands of the Appellant - Held that:- The judgment Shoorji Vallabhdas & Co. (1962 (3) TMI 6 - SUPREME Court) has been recently follows in CIT V. Excel Industries Ltd. [2013 (10) TMI 324 - SUPREME COURT] where it was reiterated that income tax is levied on real income and not hypothetical income. Therefore, entries inspired by realistic prospects of their realisation cann .....

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r succeeding years as it did. In view of the foregoing discussions the impugned order of the ITAT is set aside. - Decided in favour of assesse. - ITA 268/2008, ITA 269/2008, ITA 270/2008 - Dated:- 19-5-2015 - MR. S. RAVINDRA BHAT AND MR. R.K. GAUBA, JJ. For The Appellant : Mr. S. Ganesh Sr. Adv. with Mr. Syed Naqvi, Mrs. Namrata Kapoor Sharma and Mr. P P Kanwer, Advs. For The Respondent : Mr. N P Sahni, sr. standing counsel with Mr. Nitin Gulati, Adv. JUDGMENT : MR. JUSTICE S. RAVINDRA BHAT (OPE .....

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abad High Court. In the meantime, amounts continued to be disbursed to suppliers for the routine course of its business. However, on account of deteriorating financial conditions, the suppliers of the goods in this instance TIPCO Ltd., could not keep up its commitments. It had also failed to repay the amounts advanced by the assessee. In these circumstances, when the unpaid advances amounted, the assessee entered into a composition/settlement with the said supplier on 1.7.1997 whereby the advanc .....

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r those years. However, the Revenue for the succeeding years 1999-2000, 2000-01 and 2001-02 held that the income was deemed to have accrued in the absence of the write off. The assessee which had met with initial success before the CIT(Appeals), was aggrieved by the impugned order of the ITAT regarding accrual of income. It is contended by Mr. Ganesh, learned senior counsel firstly that in view of the entirety of the circumstances of the case, though the entries in the books noted as outstanding .....

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of time at which taxation liability is directed, i.e. accrual of income or its receipts, nevertheless the substance of the matter is income and if income does not result there cannot be tax. Learned senior counsel also relied upon the Supreme Court decision in Radhasoami Satsang V. Commissioner of Income-tax (1992) 193 ITR 321. In the said judgment the Court had held that even though the doctrine of res judicata is inapplicable to income tax proceedings. Nevertheless if the Revenue treats the pa .....

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