TMI Blog1982 (6) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... d obtained a reference to this court on the following question of law : " Whether, on the facts and in the circumstances of the case, the sum of Rs. 3,71,136 and Rs. 46,711 were properly held not to be chargeable to income-tax for the assessment year 1964-65 ? " The addition of Rs. 3,71,136, to the income returned by the assessee, was made by the ITO in the following circumstances. As regards the sale of sugar, the Central Govt. under a notification dated May 4, 1961, issued under the Central Excises and Salt Act, 1944, reduced the excise duty pay able in respect of the sugar manufactured if the production had exceeded a particular percentage when compared with the base year. On the basis of the said notification, the assessee claimed an aggregate refund of Rs. 9,31,684 for the period November 1, 1960, to October 5, 1961, by a letter dated December 2, 1964, addressed to the Collector of Customs and Central Excise, Pondicherry, and received by him on December 7, 1961. The claim for refund was accepted by the Collector, on June 7, 1962, only to the extent of Rs. 5,60,548.63 relating to the period subsequent to September 8, 1961, and a refund order was issued for the said sum. He, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time-limit prescribed under r. 11 of the Central Excise Rules, 1944, being relaxed by the Central Board, in his order dated June 7, 1962, that date should be taken to be the date of accrual of the right to the refund and that, therefore, the right to get refund should be taken to have accrued in the previous accounting year, and not during the year in question. As regards the sum of Rs. 46,711, the AAC felt that as the assessee was bound to export a portion of its production under the statutory provisions and the sum of Rs. 60 per quintal was only an " on account payment ", it cannot be taken as a revenue receipt in the year of account, The Tribunal has upheld the view of the AAC. One of the questions that arises for consideration before us is whether the sum of Rs. 3,71,135.78, being the amount actually refunded to the assessee in the year of account, can be taken as a revenue receipt in the assessment year in question or whether it should be taken as an amount accrued in the previous year when the application for the refund of excise duty was made by the assessee in pursuance of the relevant notification issued by the Central Govt. The date of the notification was May 4, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n lieu of cash incentives. The assessee who maintained his accounts on the mercantile basis and who had exported handloom fabrics, applied for and obtained such cash incentives. The assessee made applications for such cash incentives and received the same in respect of earlier applications which were filed during the accounting year ending April 13, 1967. The assessee claimed that the right to receive cash incentives arose on the date of the application itself and, therefore, the amounts received as cash incentives should be taken to have accrued on the date of the application itself and, therefore, the amounts received as cash incentives should be taken to have accrued on the date of the concerned applications. The Tribunal having accepted the claim put forward by the assessee, the matter came before this court on a reference. A Division Bench of this court took the view that as the assessee maintains its accounts on mercantile basis and it having made applications for cash incentives in the previous year, the fact that there was some delay on the part of the concerned authorities in making the actual disbursement, will not stand in the way of the assessee being assessed with rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he three months' period referred to under r.11, no refund shall be ordered. In this case the CBR has chosen to relax the rigour of r. 11 and it is only thereafter, the application for refund, so far as it related to the said sum, was considered by the authority and the refund was ordered. Admittedly, on December 2, 1961, when the claim for refund was made, the bar to give a refund in respect of the time-barred application was very much in force and in the face of the said provision, it is not open to the assessee to say that the right to get the refund had accrued to it on the date of the application. If really the Collector of Customs and Central Excise, Pondicherry, had granted relief by way of refund in respect of the sum of Rs. 3,71,135.78 without any relaxation of r. 11, it would have been contrary to the rules and the order of refund would have been void and illegal. Therefore, the right to get the refund of Rs. 3,71,135.78 cannot, in any event, be said to have accrued to the, assessee on December 2, 1961, when the claim was made or on June 7, 1962, when the application for refund was considered by the Collector, as has been held by the AAC as well as the Tribunal. Taking int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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