TMI Blog2016 (8) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... he ONGC to pay the accrued amount to the assessee. Only when a corresponding liability arises on the ONGC to pay up the accrued amount, the income will become taxable. Thus, the authorities below as also the Tribunal seriously erred in holding that the disputed income is exigible to tax. - Decided in favour of the assessee - TAX APPEAL NO. 671 of 2007 - - - Dated:- 1-7-2016 - MR. KS JHAVERI AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing services for compression of natural gas at Ankleshwar by ONGC. The assessee raised bill as per the contract. However, on account of some dispute with ONGC, the assessee showed only 50% of the contractual amount as its income in its return on the ground that the remaining amount has not been accrued. However, the Assessing Officer took the view that since income had accrued to the assessee, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real income can be brought under the tax bracket. Notional or hypothetical income cannot be taxed, as has been done by the authorities below. Hence, the impugned order passed by the Tribunal deserves to be quashed and set aside. 5. Mrs. Mauna Bhatt, learned Standing Counsel appearing for the Revenue, submitted that accrued income has not been shown by the assessee in its return and therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a judgment of the Apex Court in the case of Commissioner of Incometax v. Excel Industries Ltd., [2013] 358 ITR 295 (SC) wherein, the Apex Court made the following observations in Paras 20 21 of the judgment; 20. It follows from these decisions that income accrues when it becomes due but it must also be accompanied by a corresponding liability of the other party to pay the amount. Only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability, it cannot be said that there was any corresponding liability on the ONGC to pay the accrued amount to the assessee. Only when a corresponding liability arises on the ONGC to pay up the accrued amount, the income will become taxable. Thus, the authorities below as also the Tribunal seriously erred in holding that the disputed income is exigible to tax. 9. Thus, we answer the question i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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