TMI Blog2019 (6) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had also in the later year, claimed same amount by way of bad debts. The Tribunal while giving relief to the Assessee ensured that such claim of bad debts would stand deleted. We are broadly in agreement with the view of the Tribunal. With respect to the larger amount of ₹ 59.51 Crores, the claim was for damages for pre mature termination of the contract. The bills were raised after the termination of the contract and the contracted party did not even accepted the bills. With respect to the remaining amount of ₹ 26.47 Crores, the Tribunal has applied relevant facts and held that in view of the real income theory, no income tax can be levied on the Assessee at the relevant time. Any further, examination of the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the said Return, the Assessing Officer questioned the Assessee about the non-inclusion of two amounts of ₹ 26.47 Crores (rounded off) and ₹ 59.51 Crores (rounded off), for which Assessee had raised the bills, but not accounted for in its income. The Assessing Officer rejected the Assessee's contention that these amounts had not accrued to the Assessee and therefore, even on the basis of mercantile system of accounting, the same do not have to be offered to tax. The Assessing Officer was of the opinion that since the Assessee had raised the bills whether payments were made or not would not be relevant in view of the fact that the Assessee followed mercantile system of accounting. In Appeal, Commissioner of Income Tax (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the termination of the contract and the bill was not even accepted by the DPC. The income had therefore never accrued to the Assessee. 5. With respect to the sum of ₹ 26.47 Crores, the Tribunal noted that the parent Company was in severe financial crisis; the assessee could not receive any payment for a long time; eventually after delay of nearly four years, the Assessee could recover only 8.58% of the total claim. Interalia on such factors, the Tribunal applied the theory of real income and deleted the addition. 6. We may note that in the meantime, the Assessee had also in the later year, claimed same amount by way of bad debts. The Tribunal while giving relief to the Assessee ensured that such claim of bad d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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