TMI Blog2022 (9) TMI 1406X X X X Extracts X X X X X X X X Extracts X X X X ..... ve come into existence and the assessee must have acquired a right to receive the payment. Unless and until his contribution or parenthood is effective in bringing into existence a debt or a right to receive the payment or in other words, a debitum in praesenti, solvendum in futuro, it cannot be said that any income has accrued to the assessee. The Bank, no doubt receives the locker rent in advance for future period. The said amount can be appropriated for the relevant future years when service is provided. The ITAT, in our view has rightly applied the ratio in Bank of Tokyo Limited and held that no addition was warranted in respect of the locker rent received in advance. Accordingly, we answer this question against the revenue and in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON BLE MR. JUSTICE UMESH M ADIGA APPELLANTS: SRI E I SANMATHI, STANDING COUNSEL RESPONDENT: SRI P SURYANARAYANA, SR. COUNSEL AND SMT. TANMAYEE RAJKUMAR, ADVOCATE JUDGMENT This appeal by the Revenue directed against the judgment in ITA No.1493/Bang/2-14 dated 15.09.2017 has been admitted to consider the seven questions of law. 2. Shri E.I.Sanmathi, learned Standing Counsel for the Revenue submits that only following three questions arise for consideration and remaining questions have been answered in ITA No.278/2018 decided on 30.06.2021. After hearing the learned Advocate for the appellants and Shri P.Suryanarayana, learned Senior Advocate and Shri Sanmathi, the third question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this Court in ITA Nos.27 and 28 of 2017 decided on 30.11.2020 . In his usual fairness, Shri Sanmathi did not dispute the said statement. Hence, only question Nos.1 and 3 remain for consideration. 4. The assessee Bank, in the course of its business collects locker rents in advance and letter of credits. It also protects foreign exchange fluctuation in international contracts of forward trading. 5. Shri E.I.Sanmathi, submitted that the Bank has in fact received the rents for more than one year. Therefore, locker rents collected must be treated as income during the previous years of assessment and it is taxable because the Bank follows the mercantile system of accounting and it cannot be permitted to spread over the income for the fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice is provided. The ITAT, in our view has rightly applied the ratio in Bank of Tokyo Limited and held that no addition was warranted in respect of the locker rent received in advance. Accordingly, we answer this question against the revenue and in favour of the assessee. 8. The next question is with regard to the protection of foreign exchange fluctuation pertaining to forwards contracts. In substance, the Bank agrees to pay the money in Indian currency equal to the foreign exchange rate by entering into a contract in respect of the fluctuation of the foreign exchange value. In that scenario, the Bank may either gain some money or lose money depending upon the exchange rate as on the date of the conclusion of the contract. In the int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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