DCIT, Hyderabad V. M/s. NCS Sugars Limited, Hyderabad

ITA 1660/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3234 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 23-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D BALAJI
• Assessee Lawyers: B V PRASAD REDDY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.1660/HYD/2010 ASSESSMENT YEAR : 2007-08 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 16(1), HYDERABAD. VS M/S NCS SUGAR LTD., HYDERABAD. (PAN AABCN 5273 G) APPELLANT RESPONDENT APPELLANT BY : SHRI D. BALAJI RESPONDENT BY : SHRI B.V. PRASAD REDDY ORDER PER CHANDRA POOJARI, A.M.: THIS APPEAL PREFERRED BY THE REVENUE IS DIRE CTED AGAINST THE ORDER PASSED BY THE CIT(A) V, HYDERAB AD DATED 10.10.2010 AND PERTAINS TO THE ASSESSMENT Y EAR 2007-08. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS IN IT S APPEAL: 1. THE CIT(A) IS NOT CORRECT IN HOLDING THE ADVANCE LICENSE COMMITTEE SHOULD BE RECOGNISED ONLY WHEN THE OBLIGATION OF EXPORT IS MET AND THAT THERE COULD BE NO HYPOTHETICAL OR ILLUSORY INCOME, WHEREAS IN FACT THE LIABILITY CREATED BY THE ASSESSEE IS HYPOTHETICAL AND CONTINGENT UPON NON FULFILMENT OF THE OBLIGATION. ITA NO.1660/HYD/2010 M/S NSC SUGARS LIMITED, HYDERABAD 2 2. THE CIT(A) OUGHT TO HAVE HELD THAT THE POSTPONEMENT OF INCOME RECOGNITION IS DELIBERATELY RESORTED TO EVEN WHEN THERE IS NO REAL INCOME OR REAL LIABILITY ACCRUING TO THE ASSESSEE. 3. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT SIMILAR ISSUE CAME UP FOR CONSIDERATIO N BEFORE THIS TRIBUNAL VIDE ORDER DATED 30.10.2009 & 12.11.2010 IN ASSESSEES OWN CASE IN ITA NOS.362/H/2009 & 658/HYD/2010 FOR THE ASSESSMENT YEARS 2005-06 & 2006-07 RESPECTIVELY, WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE BY HOLDING AS FOLLOWS: IT IS APPROPRIATE TO RECOGNISE THE REVENUE IN SUCH CASES ONLY WHEN IT BECOMES REASONABLY CERTAIN AND AS PER RECOGNISED ACCOUNTING PRINCIPLES, REVENUE SHOULD BE RECOGNISED ONLY WHEN THE ADVANCE LICENCE COMMITMENT IS MET, SINCE WHAT CAN BE BROUGHT TO TAX IS ONLY THE REAL INCOME ACCRUED TO THE ASSESSEE AND THERE COULD BE NO LEVY OF TAX ON ANY HYPOTHETICAL OR ILLUSORY INCOME. 4. IN VIEW OF THE ABOVE PRECEDENT LAID DOWN BY THE TRIBUNAL, WE ARE INCLINED TO DISMISS THE GROUNDS TA KEN BY THE REVENUE. ITA NO.1660/HYD/2010 M/S NSC SUGARS LIMITED, HYDERABAD 3 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 .06.201 1 SD/- G.C. GUPTA SD/- CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT M EMBER DATED THE 17 TH JUNE, 2011 COPY FORWARDED TO: 1. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 16(1), HYDERABAD 2. M/S NCS SUGARS LIMITED, 405, MINAR APARTMENTS, DECCAN TOWERS, BASHEER BAGH, HYDERABAD. 3. THE CIT(A) V, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD. NP/