2024 (6) TMI 1066

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....es pre-payment of a sales tax liability at discounted value. 3. In such context, the Tribunal while allowing the assessee's appeal, following the decision of the Special Bench of the tribunal in the case Sulzer India Ltd. Vs. Jt. CIT. 138 ITD 137 observed that the issue was required to be decided in favour of the assessee. The relevant observations of the Tribunal allowing the assessee's appeal are required to be noted, and read thus:- "5. We find that the CIT-LTU had invoked the revisionary powers with regard to three issues i.e., pre-payment of sales tax liability at discounted value, DEPB licence/focus market licences and compensation from insurance company. We find that all the three issues, at the time of issuing notice u/s....

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....of revisionary proceedings. As a result appeal filed by assessee stands allowed." (emphasis added) 4. In the present appeal, the Revenue has raised the following questions of law.:- "a) Whether, on the facts and in the circumstances of the case and in law, the ITAT was right in allowing the claim of the assessee of an amount of Rs. 15.23 crores, being the amount saved on account of prepaid sales taxes as capital receipts. b) Whether, on the facts and in the circumstances of the case and in law, the ITAT was right in allowing the claim of the assessee of an amount of Rs. 60.74 crores, being the benefits on account of DEPB License/Focus Market Licenses. c) Whether, on the facts and in the circum....

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.... crores on account of pre-paid sales tax. Such amount was sought to be taxed by the assessing officer as revenue receipt. Thus, as held by the Supreme Court in Balkrishna's case (supra), such amount was required to be treated as a capital receipt. The first question of law as raised by the Revenue thus stands squarely answered. The Revenue's contention on addition of the said amount as the assessee's income needs to be rejected. 7. Insofar as the second question of law is concerned, as stated on behalf of the parties, the question is squarely covered by the decision of the Supreme Court in the case "Commissioner of Income Tax Vs. Excel Industries Ltd." (2013)358 ITR 295 (SC). Our attention is drawn to the contentions of the parties as al....

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.... in transit. The assessee at that time had merely filed a claim with the insurance company. This claim had not been approved as the insurance company had neither accepted the same nor given any assurance for making payment. Therefore, no income had "accrued" which could be taxed. The Tribunal rightly held that ordinarily the income is said to have accrued to a person when he acquires the right to income and this should be enforceable right, though actual quantification or receipt may follow in due course. The mere claim to income without any enforceable right cannot be regarded as an accrued income for the purpose of Income-Tax Act. ... ... ..." (emphasis added) 9. The Delhi High Court in coming to the aforesaid conclusion also referr....