2022 (9) TMI 1406

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....l for the Revenue submits that only following three questions arise for consideration and remaining questions have been answered in ITA No.278/2018 decided on 30.06.2021. After hearing the learned Advocate for the appellants and Shri P.Suryanarayana, learned Senior Advocate and Shri Sanmathi, the third question is re-framed. Thus, following three questions have been considered in this appeal: (1) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the disallowance of claim of deduction on account of commission on locker rent received in advance of Rs.112.84 Crore by following the decision of Apex Court in the case of CIT vs. EXCEL INDUSTRIES (reported in 358 ITR page 295) and dec....

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....tted that the Bank has in fact received the rents for more than one year. Therefore, locker rents collected must be treated as income during the previous years of assessment and it is taxable because the Bank follows the mercantile system of accounting and it cannot be permitted to spread over the income for the future period. 6. The ITAT has considered this aspect in extenso in para-25 of its order. Following the authority in CIT VS. Bank Of Tokyo Limited [1993]71 TAXMAN 85(Cal), it has held that even though the assessee-bank has received the entire amount towards the guarantee commission, no debt is actually created in favour of the assessee- bank for the entire amount. The right of the customer is always reserved to recall the payment....

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....ney in Indian currency equal to the foreign exchange rate by entering into a contract in respect of the fluctuation of the foreign exchange value. In that scenario, the Bank may either gain some money or lose money depending upon the exchange rate as on the date of the conclusion of the contract. In the interregnum period, unrealized gain, if any, is a notional figure recorded in the books of accounts and the same will be subject to the completion of transaction at the end of the contract period. 9. This aspect was considered by the Madras High Court in the case of Indian Overseas Bank Vs. Commissioner of Income-tax [1990] 51 Taxman 283 (Madras). The Madras High Court following the authority in CIT Vs. Shoorji Vallabhdas and Co. [1962] 4....