TaxTMI 
TaxTMI 
2011 (2) TMI 159
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....he Income Tax Act, 1961 against the order of Income Tax Appellate Tribunal Delhi bench 'E' New Delhi passed in ITA No.7368/Del/92 filed by the respondent and ITA No.7204/Del/92 filed by the appellant for the assessment year 1988-89, raising following substantial questions of law:- "Whether the Hon'ble ITAT was right in law i) in allowing the carry forward of loss on the basis of the return filed after time allowed by the AO on extension application; ii) in allowing the deduction on account of net refund of excise duty; iii) in dismissing the appeal of the appellant against the deletion of Rs.30,34,414/- by the learned CIT (A) on account of excise duty refund credited to P&L account on accrual basis; &n....
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....) of the Act, rejecting the plea of the assessee that the refund had neither been received nor accrued and mere entry in profit and loss account could not be treated as accrual of income. 6. The Assessing Officer disallowed part of deduction towards car expenses held to be attributable to personal use of the Director. 7. Claim of the assessee for deduction of foreign traveling expenses was disallowed on the ground that the expenditure was capital in nature. 8. The CIT(A) partly allowed the appeal of the assessee on which cross appeals were filed by the revenue and the assessee. 9. The Tribunal accepted the stand of the assessee and held as under:- i ) I ssue of carry forward of loss ....
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....ns. It is admitted position that the assessee's bank guarantee was revoked due to order of the Collector (Appeals), Central excise. But the Central Excise Department, did not accept this order and preferred the appeal before the CEGAT. The CEGAT vide its order pronounced on 8.5.1990 reversed the findings of the Collector (Appeals), Central Excise. Thus when the Collector (Appeals), Central Excise passed the order, it cannot be said that the assessee to claim the refund. It is settled law that the assessee could not be penalized for wrong entries made in the books of account. The tax cannot be levied on hypothetical income. A transaction of entry in the books of account or its treatment therein by the assessee may not always be relevant to d....
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....he same is deleted. This ground of appeal is allowed." iii)Refund credited to P&L Account on hypothetical basis was not income. "43. We have considered the rival submissions. It is settled law that merely because the entry of an amount has been made in the profit and loss account or in the books of account was not enough in holding that an income has accrued to the assessee. The assessee has claimed refund of certain amount of central excise on the basis of Supreme Court decision in some other case. Thus, the assessee was not legally entitled to refund in its own case. It is settled law that it was the real income and not the hypothetical income which has to be brought to tax. Our views find support from the decisions reported ....
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....ing oneself abreast the latest technique of his business or for foreign collaboration has to be held as revenue expenditure. Our views find support from the decisions reported in 76 ITR 644 (AP), 157 ITR 751 (Bom,), 14 ITR 335 (Bom.) and 132 ITR 401 (Gaj.). We therefore hold that the CIT(A) has correctly appreciated the facts in deleting the addition. While upholding his findings, we dismiss the ground of appeal raised by the revenue." 10. We have heard learned counsel for the appellant. We proceed to deal with the questions raised by the revenue. Re: (i) 11. Learned counsel for the revenue submitted that the return of the assessee being beyond the time allowed by the Assessing Officer, carry forward of loss was not permissi....