CIT 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 Section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the assessment year 1987-88:

(2.) The facts as noticed in the statement of case are that the assessee filed its return on 30-7-1987 declaring net loss at Rs. 3,28,179. During the course of assessment proceedings, the assessing officer 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 Assistant Commissioner) which was charged to Profit and Loss Account in the earlier years. The assessing officer relying on the judgment of the Honble Supreme Court in the case of Kedarnath Jute Mfg. Co. Ltd. v. CIT, 1971 82 ITR 3630 made an addition of Rs. 17,73,999 as per the provisions of Section 41(1) of the Act. Feeling aggrieved, the assessee filed an appeal before the Commissioner (Appeals) who vide order dated 9-8-1990 confirmed the said addition. On further appeal by the assessee to the Tribunal, it 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 Honble 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. Accordingly, relying upon decision of the apex court in CIT v. Hindustan Housing & Land Development Trust Ltd., 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 Section 41(1) of the Act as the cessation of liability in the case will be on the date of final verdict by the Honble Supreme Court. The Tribunal accepting the plea of the assessee, partly allowed the appeal vide order dated 10-12-1990.

(3.) We have heard the learned Counsel for the revenue.