TMI Blog2000 (9) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... olding that the amount of Rs.5,69,777 could not be taxed as income during the accounting period relevant to the assessment year in question since the dispute regarding subsidy was not yet decided? 2. Whether the view of the Appellate Tribunal that till the final decision on the dispute regarding subsidy is reached, it cannot be said that income has accrued to the assessee and it can be taxed only in the year of accrual when the issue is decided or settled and the amount received by the assessee is correct in law?" The two questions are virtually interconnected and common answer can be given. The facts giving rise to this reference are as under: The Government had passed a resolution on October 20, 1972, wherein it was decided tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that the sum of Rs.5,69,777 being the amount of the subsidy for which the bills had been submitted by the appellant to the Government had become due to the appellant in the previous year relevant to the assessment year under consideration itself. It is not that the appellant has credited this amount in its accounts without any basis." The assessee then carried the matter to the Income-tax Appellate Tribunal. The Tribunal relied on a decision of the Bombay High Court in Dhrangadhra Chemical Works Ltd. v. CIT [1977] 106 ITR 473 and held that "till the final decision on the dispute regarding subsidy is reached, it cannot be said that the income has accrued to the assessee in the year under consideration. Income cannot be accrued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fallen altogether. The extra amount of compensation of Rs.7,24,914 was not income arising or accruing to the respondent during the previous year relevant to the assessment year 1956-57." The case of the present assessee is on a stronger foundation based on the facts which we have gathered from various orders placed before us that although a decree was passed by the civil court for the amount of subsidy, the assessee did not receive the payment of subsidy under the scheme and the grant of subsidy was a subject-matter of dispute in the pending appeal. This is not a case where the income had actually accrued to the assessee and the mere fact that he has credited the said amount in his account books, therefore, is not decisive. To concl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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