2000 (9) TMI 16

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n the circumstances of the case, the Income-tax Appellate Tribunal has been right in law in holding that the amount of Rs.5,69,777 could not be taxed as income during the accounting period relevant to the assessment year in question since the dispute regarding subsidy was not yet decided? 2. Whether the view of the Appellate Tribunal that till the final decision on the dispute regarding subsidy is reached, it cannot be said that income has accrued to the assessee and it can be taxed only in the year of accrual when the issue is decided or settled and the amount received by the assessee is correct in law?" The two questions are virtually interconnected and common answer can be given. The facts giving rise to this reference are as un....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....), who confirmed the order of the Assessing Officer by recording his conclusion thus: "I am of the view that the sum of Rs.5,69,777 being the amount of the subsidy for which the bills had been submitted by the appellant to the Government had become due to the appellant in the previous year relevant to the assessment year under consideration itself. It is not that the appellant has credited this amount in its accounts without any basis." The assessee then carried the matter to the Income-tax Appellate Tribunal. The Tribunal relied on a decision of the Bombay High Court in Dhrangadhra Chemical Works Ltd. v. CIT [1977] 106 ITR 473 and held that "till the final decision on the dispute regarding subsidy is reached, it cannot be said that t....