TMI Blog2008 (2) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Year 1997-98. 2. The Assessee had entered into two agreements with M/s South Eastern Coalfields Ltd. (SECL) for transportation of coal. Certain disputes arose between the Assessee and SECL with the result that the agreements were terminated and disputes referred for arbitration. In terms of the arbitration Award, the Assessee was to receive a sum of Rs.6,57,31,517/-. Objections appear to have been filed to the Award but they were rejected by the Court of competent jurisdiction on 26th July, 1996. Thereafter, SECL challenged the Award before the Madhya Pradesh High Court at Jabalpur. While admitting the appeal filed by SECL, the Madhya Pradesh High Court passed the following orders on 14th October, 1996 and 13th December, 1996. The ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Subsequently, the assessment was reopened under Section 148 of the Act on the ground that there was reason to believe that the amount received by the Assessee as a result of the interim orders passed by the Madhya Pradesh High Court had escaped assessment. 5. The Assessee naturally contested the case before the Assessing Officer but its objections were overruled and an assessment order was passed treating the amount of Rs.3,28,65,728/- as the Assessee"s income liable to tax. 6. On appeal, the Commissioner of Income Tax (Appeals) [CIT (A)] came to the conclusion that in the event SECL succeeded in its plea before the Madhya Pradesh High Court, the Assessee would be obliged to return the amount received by it and, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as permitted by the High Court to withdraw the amount on furnishing a security and the assessee did withdraw the amount and credited it in its suspense account. The question that arose before the Supreme Court was whether the Revenue could claim that the amount payable to the assessee as compensation could be said to have accrued to it as income during the relevant previous year. While answering this in the negative and accepting the contention of the assessee, it was held that the assessee had no absolute right to receive the amount pending the appeal, since it was allowed by the High Court to withdraw the amount deposited by the State Government only on furnishing a security for refunding the amount in the event of the appeal filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the rate prevailing prior to the notification fixing the levy price of sugar with the result that the assessee was able to sell the sugar at Rs.131.01 per quintal plus excise duty until further orders. 11. The Andhra Pradesh High Court had not cast any liability on the assessee to refund the amount to the purchasers of sugar from whom the excess amount was realized in the event the writ petition filed by the assessee was dismissed. As luck would have it, the writ petition filed by the assessee was in fact dismissed and even in the final order passed by the High Court, there was no direction to the assessee to refund the amount collected by it. The net result of the decision of the Andhra Pradesh High Court was that the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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