AI Drafter 
TaxTMI 
TaxTMI 
2017 (3) TMI 392
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.... Tribunal has dismissed the said appeal preferred by the Revenue and confirming the order passed by the learned CIT(A) deleting the addition of Rs. 5,78,28,058/, the Revenue has preferred the present Tax Appeal with the following substantial question of law. "Whether the ITAT is right in law and on facts in deleting the addition of Rs. 5,78,28,058/in holding carbon receipts as capital receipt?" However, considering the impugned judgment and order passed by the learned Tribunal, the correct proposed question of law would be as under: "Whether the ITAT is right in law and on facts in confirming the order passed by the learned CIT(A) in deleting the addition of Rs. 5,78,28,058/on the ground that the aforesaid income has not accrued / ....
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....see. We have perused and considered the order passed by the AO as well as the orders passed by the learned AO as well as the orders passed by the learned CIT(A) as well as the impugned judgment and order passed by the learned Tribunal. [4.1] Considering the order passed by the learned AO it appears that the AO made the addition of Rs. 5,78,28,058/on the ground that the amount of Rs. 5,78,28,058/was receivable and/or can be said to have been accrued in the year under consideration and therefore, the same is required to be included in the income of the assessee in the year under consideration. However, learned CIT(A) as well as the learned Tribunal have held that the carbon receipts were neither sold nor transferred by the assessee during ....
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....was submitted before us by learned counsel for the Revenue that in view of the provisions of Section 28(iv) of the Act, the value of the benefit obtained by the assessee is its income and is liable to tax under the head "Profits and gains of business or profession". We are unable to accept the contention of learned counsel for the Revenue for several reasons. 16. Section 28(iv) of the Act reads as follows:" 28. Profits and gains of business or profession.The following income shall be chargeable to incometax under the head "Profits and gains of business or profession" ... (iv) the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession;" 17. Firs....
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....nt even though it may not be immediately." 19. This Court further held, and in our opinion more importantly, that income accrues when there "arises a corresponding liability of the other party from whom the income becomes due to pay that amount." 20. It follows from these decisions that income accrues when it becomes due but it must also be accompanied by a corresponding liability of the other party to pay the amount. Only then can it be said that for the purposes of taxability that the income is not hypothetical and it has really accrued to the assessee. 21. In so far as the present case is concerned, even if it is assumed that the assessee was entitled to the benefits under the advance licences as well as under the duty entitleme....
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....td. vs. Commissioner of Income Tax, [1965] 57 ITR 521 (SC) wherein it was held that income tax is a tax on real income. 25. Finally a reference was made to State Bank of Travancore vs. Commissioner of Income Tax, [1986] 158 ITR 102 (SC) wherein the majority view was that accrual of income must be real, taking into account the actuality of the situation; whether the accrual had taken place or not must, in appropriate cases, be judged on the principles of real income theory. The majority opinion went on to say: "What has really accrued to the assessee has to be found out and what has accrued must be considered from the point of view of real income taking the probability or improbability of realisation in a realistic manner and dov....