TaxTMI 
TaxTMI 
2006 (7) TMI 144
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....5,28,862 being the refund of countervailing duty received by the assessee during the year of account relevant to the assessment year 1987-88 could be brought to tax in the assessment year 1987-88 under the provisions of section 41(1) of the Income-tax Act? 2. Whether, on the facts and in the circumstances of the case and also in the light of the decision of the Supreme Court in CIT v. United Provinces Electric Supply Co. [2000] 224 ITR 764, can the amount of Rs. 55,28,862 be brought to tax in the assessment year 1987-88 under the provisions of section 41(2) of the Income-tax Act? 3. Whether, on the facts and in the circumstances of the case, can the amount of Rs. 55,28,862 be brought to tax as a business receipt in the assessment year 198....
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....-87 received from the Central Excise Department a refund of Rs. 55,28,862 as countervailing duty. The assessee's contention was that there was dispute about the assessee's eligibility to refund of countervailing duty and until that dispute is finally resolved, the amount would not become due to the assessee and cannot be taken as having accrued to the assessee. We are not prepared to accept the contention of the assessee that the refund had not actually accrued to the assessee. In our view the decision of the apex court in CIT v. Hindustan Housing and Land Development Trust Ltd. [1986] 161 ITR 524 would not apply to the facts of this case. The apex court held that the right to enhanced compensation is an inchoate right and additional compen....
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....efit as and when he obtains refund of the amount so paid. Whether there is a possibility of the refund being set at naught on a future date, is not a relevant consideration. Once the assessee gets back the amount which was claimed and allowed as business expenditure during an earlier year, the deeming provision in section 41(1) comes into play and it is not necessary that the Revenue should await the verdict of a higher court or tribunal. If the higher court or tribunal upholds the levy at a later date the assessee is not without a remedy to get back the relief. We are of the view the abovementioned judgment is squarely applicable to the facts of this case. If that be so, the finding of the Commissioner as well as the Tribunal cannot be su....