2015 (4) TMI 515

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....sar Bench, Amritsar (hereinafter referred to as "the Tribunal") in ITA No.70 (Asr)/2011 for the assessment year 2002-03. The appellant sought to raise the following substantial question of law for the consideration of this Court:- "i) Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal has fallen in error in holding that the transport subsidy amounting to Rs. 16,11,477/- which was never received by the assessee and for which merely a claim was lodged with the Jammu & Kashmir Government could be treated as income accrued and taxed in the hand of the assessee?" Learned senior counsel for the appellant has vehemently argued that the above said amount was never received by the assessee and therefore it....

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.... was neither accrual nor receipt of income though entry had been made in the books, it was only hypothetical income and had not materialised. Therefore, the order of the Tribunal was not justified in upholding the assessment order and allowing the appeal of the revenue. Counsel for the revenue on the other hand has submitted that this was neither the case of the assessee before the Tribunal as such nor before the assessing authority rather the benefit of Section 80-IB of the Act had been sought. Nil return had been filed and on re-opening after recording reasons by the assessing authority, the assessment order had been passed on 4.12.2009(Annexure A/2) and it had been noticed that the assessee had been adopting mercantile system of accou....

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.... assessee was not eligible for deduction since the receipt of transport subsidy did not fall in the category of direct source of profit but was any other profit. However, the CIT granted the benefit of a sum of Rs. 16,11,480/- on account of the fact that it had not been received by the assessee and therefore, need not be taxed at the hands of the assessee. Two appeals were filed before the Tribunal by both the parties. On the basis of consensus arrived at, that benefit of rebate under Section 80-IB of the Act could not be granted, on the transport subsidy received in view of the judgment of the Apex Court in CIT Vs. Sterling Foods (1999) 237 ITR 579 (SC)  and CIT Vs. Pandian Chemicals Ltd. 262 ITR 278 (SC) , the appeal of the assess....