TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 785
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.... and in law in upholding the action of the AO in treating the accrued interest income of Rs. 1,99,89,000/- and Rs. 96,62 pursuant to arbitration award, as income of the assessee. 4. The ld. CIT(A) -VIII erred on facts and in law in not adjudicating the nature of alleged accrued interest income of Rs. 1.99,89,000/- and Rs. 96,62,250/- as Business Income. 5. That the assessee craves leave to add, alter, modify, amend, delete, substitute any Ground of Appeal at any time before the disposal of this appeal." 4. At the very outset, the ld. counsel for the assessee drew our attention to the decision of this Tribunal in assessee's own case in ITA No. 1722/DEL/2006 and pointed out that the coordinate bench has decided the issue vide Ground No. 2 of the present appeal. 5. Though the ld. DR, in his written submissions pointed out certain facts read with some judicial decisions, but could not point out any distinguishing facts. 6. We have carefully considered the orders of the authorities below. We find force in the contention of the ld. counsel for the assessee. The impugned issue was considered by the co-ordinate bench in ITA No. 1722/DEL/2006. The relevant findings read as under: ....
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....ear 2001-02 relying IPCA Laboratories Ltd. case the Tribunal has held that since business income of assessee was negative after excluding interest, dividend and miscellaneous income, no deduction was allowable under that section. Ld. Counsel submitted that the aforesaid decision for assessment year 2001-02 is challenged and pending before Hon'ble High Court. It was submitted that in IPCA case issue involved was regarding computation of deduction u/s 80HHC (3)(c) of the Act and the issue regarding allowance of deduction was not subject matter of the dispute. It was submitted that in the present case the issue pertains to the question of set off of deduction computed in terms of section 80HHC (3)(c) of the Act in arriving as the total income. Ld. Counsel relied for judgment of Hon'ble Supreme Court of India in CIT vs. Williamson Financial Services 297 ITR 17 and Bombay High Court in V. M. Salgaoncar Sales International vs. ACIT: 281 CTR 191. 26. Ld. Counsel relied judgment of Hon'ble Supreme Court of India in Commissioner of Income Tax v. Reliance Energy Ltd (2021) 127 taxmann.com 69 to draw an analogy, where in regard to section 80IA it is held that the scope of sub section 5 of s....
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....essing Officer. It is relevant to reproduce Section 80AB of the Act which is as follows: "80AB. Deductions to be made with reference to the income included in the gross total income. - Where any deduction is required to be made or allowed under any section included in this Chapter under the heading "C. - Deductions in respect of certain incomes" in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income." As stated above, Section 80AB was inserted in the year 1981 to get over a judgment of this Court in Cloth Traders (P) Ltd. (supra). The Circular dated 22.09.1980 issued by the CBDT makes it clear that the reason for introduction of Section 80AB of the Act was for the deductions under Part C of Chapter ....
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....Rs. 2,14,96,329/- and interest of Rs. 1,98,88,327/-. 12. When the assessee did not receive the award, it filed execution proceedings before the Hon'ble High Court of Delhi. But, due to lack of collateral security, could not get favourable order for execution of arbitral award. However, subsequent to newspaper advertisement for sale of property by KJI, the assessee approached the court for execution proceedings and obtained favourable orders for attachment. 13. When the properties of KJI were attached, it approached the Disputes Settlement Committee for amicable settlement. On 13.03.2008, ultimately, a Memorandum of Settlement was signed and the assessee received post dated cheques of Rs. 2.75 crores upfront, which was adjusted against the advance recoverable. But the post dated cheques could not get encashed. However, as and when the cheques got encashed, the assessee offered the same in its income in the subsequent years which is evident from the following chart: 14. On the above facts, it would be pertinent to refer to the Accounting Standard - AS-9 on Revenue recognition issued by the ICAI wherein effect of uncertainty on revenue recognition is provided : "Where the abi....