COMMISSIONER OF INCOME TAX Vs. SURINDER MOHAN JALOTA

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal, Chandigarh Bench (hereinafter referred to as "the Tribunal") has referred the following question of law on a direction issued by this Court in ITC No. 83 of 1992 for opinion of this Court under s. 256 (2) of the IT Act, 1961 (for short "the Act") for the asst. yr. 1987 -88 : "Whether on the facts and in the circumstances, the Tribunal was right in law in deleting the addition made on account of receipt of excise duty refund when the provisions of s. 41(1) r/w s. 43B of the IT Act, 1961 are applicable in the case of the assessee - loss at Rs. 3,28,179. During the course of assessment proceedings, the AO observed that the assessee had credited a sum of Rs. 17,73,999 in the suspense account and the said amount was refund of customs duty (wrongly mentioned as excise tariff by Asstt. CIT) which was charged to P&L a/c in the earlier years. The AO relying on the judgment of the Hon'ble Supreme Court in the case of Kedarnath Jute Mfg. Co. Ltd. vs. CIT (1971) 82 ITR 363 (SC) made an addition of Rs. 17,73,999 as per the provisions of s. 41(1) of the Act. Feeling aggrieved, the assessee filed an appeal before the CIT was pleaded that the refund in pursuance to order of Bombay High Court was conditional as the assessee was bound to repay the amount in question within sixty days of the order of Hon'ble Supreme Court in case the decision was against the assessee in the appeal filed by the Government against the order of the Bombay High Court.

(2.) ACCORDINGLY , relying upon decision of the apex Court in CIT vs. Hindustan Housing and Land Development Trust Ltd. (1986) 58 CTR (SC) 179 : (1986) 161 ITR 524 (SC), it was urged that the right to receive the income had not accrued to the assessee within the meaning of s. 41(1) of the Act as the cessation of liability in the case will be on the date of final verdict by the Hon'ble 1990.

(3.) WE have heard the learned counsel for the Revenue.