2013 (7) TMI 576

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....ent year 1993- 94. 2. The assessee-Firm is engaged in the business of manufacturing rectified spirit and related alcoholic products. For the assessment year 1993-94, the return was filed on 29-07-1994 declaring the total income of Rs.38,63,020/-. The assessment was completed under Section 143(3) of the Income Tax Act ('the Act' for short) on 27-02-1996 adopting the total income of Rs.39,81,250/-. Addition was made under Section 40A(3). While completing the assessment for the year 1997-98, the Assessing Officer found that the assessee has received enhanced price for rectified spirit supplied by it to various arrack bottling units on behalf of the Government of Karnataka. The same was shown as outstanding liability in the balance sheet fil....

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....cannot be said to have accrued to the assessee and therefore, ordered for deletion. Aggrieved by the said order, the revenue preferred an appeal before the Tribunal. 4. The Tribunal held that the amount was not received by the assessee unconditionally and was wrapped with the litigation. Unless the assessee is said to be an undisputed owner in his own right to receive the sum, the income cannot be said to have accrued. The income cannot accrue merely for the reason that it will take years to decide the dispute. Though the assessee is disputing the repeal of the order of Karnataka Government, still it cannot be said that the assessee has become the absolute owner of the sum received, which can be considered as accrued income. Therefore, t....

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....ether the Tribunal was right in holding that a sum of Rs.2,06,33,600/- received from the Excise Commissioner during the current assessment year for the difference in supply of alcoholic products in earlier years cannot be treated as income of the assessee during the current assessment year?" 8. The facts are not in dispute. The assessee is a dealer in liquor distributing the rectified spirit to various retail vendors on behalf of the Government. By a Government Order dated 12-5-1992, the amount payable to the assessee was enhanced, consequently, the assessee was entitled to a sum of Rs.2,06,33,600/-. In terms of the Government Order, the said amount was paid to the assessee. It is in the nature of revenue receipt. The said amount was pai....