DCIT 6(2)(1), MUMBAI V. DELOITTE & TOUCHE CONSULTING INIDA P. LTDERVICE INDIA P.LTD, MUMBAI

ITA 4136/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7797 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Department
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 03-07-2015
• Court: TRIBUNAL
• Department Lawyers: CHALLENGING IMPUGNED S DATED
• Keywords: Tax effect
• Section: 28

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, D MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K.PRADHAN, ACCOUNTANT MEMBER ITA NO.4135/MUM/2015 & 4136/MUM/2015 ASSESSMENT YEAR: 2009-10 & 2011-12 DCIT 6(2)(1) / VS. DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 12, DR A.B.ROAD, SHIV SAGAR ESTATE, WORLI, MUMBAI 400 008 ( ! / REVENUE) ( '# $ /ASSESSEE) PAN. NO .AACCD4805B % !& ' $ ( / DATE OF HEARING: 15/03/2017 ' $ ( / DATE OF ORDER: 15/03/2017 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE REVENUE CHALLENGING THE IMPUGNED ORDERS DATED 12/02/2015 AND 11/02/2015 RESPECTIVELY. '# $ !' / ASSESSEE BY SHRI NEERAJ SHETH ! !' / REVENUE BY SHRI PURUSHOTTAM KUMAR ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 2 2. DURING HEARING THE LEARNED COUNSEL FOR THE ASSES SEE SHRI NEERAJ SHETH CONTENDED THAT THE TAX EFFECT IN ITA NO.4136/MUM/2015 (A.Y.2011-12) IS LESS THAN THE PRESCRIBED MONETARY LIMIT. 3. THE LEARNED DR DID NOT CONTROVERT THIS FACTUAL M ATRIX / ASSERTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE TOTAL ADDITI ON MADE BY THE ASSESSING OFFICER IN RESPECT OF UNRECONCILED AIR / ITS DATA IS RS.27,10,970/-, THUS, THE TOTAL TAX EFF ECT COMES TO RS.9,00,516/- WHICH IS BELOW PRESCRIBED MONETARY LIMIT, THEREFORE, CBDT INSTRUCTION NO.21 OF 2015, DATED 10/12/2015 (F NO.279/MISC./142/ 2007-IT(PT) IS APPLICABLE, WHEREIN, THE DEPARTMENT WAS ADVISED/DIR ECTED BY THE BOARD NOT TO FILE APPEAL IN THE CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE FOLLOWING MONETARY LIMIT .:- SL. NO. APPEALS IN INCOME TAX MATTERS MONETARY LIMIT (IN RS.) 1. BEFORE ITAT 10,00,000/ - 2. U/S 260 A BEFORE HONBLE HIGH COURT 20,00,000/ - 3. BEFORE HONBLE SUPREME COURT 25,00,000/ - IN VIEW OF THE ABOVE INSTRUCTION, SINCE, THE TAX EF FECT IS LESS THAN RS.10,00,000/-, CONSEQUENTLY, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE, THEREFORE, DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 3 5. NOW WE SHALL TAKE UP ITA NO.4135/MUM/2015 (A.Y.2009-10). THE LEARNED COUNSEL EXPLAINED THAT I NCOME WAS OFFERED IN THE NEXT YEAR WHEREAS THE ASSESSING OFFICER ASSESSED IN THIS YEAR. OUR ATTENTION WAS INVITED TO PAGE.9 OF THE IMPUGNED ORDER BY PLACING RELIANCE UPON THE DEC ISION FROM HON'BLE APEX COURT IN CIT VS EXCEL INDUSTRIES LTD., (38 TAXMANN 100) (SC). IT WAS ALSO EXPLAINED THAT T HE TAX RATE IN BOTH THE YEARS IS THE SAME, THEREFORE, THER E IS NO LOSS TO THE REVENUE. THE LEARNED DR DEFENDED THE AD DITION MADE BY THE ASSESSING OFFICER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVA NT PORTION FROM THE ORDER IN CIT VS. EXCEL INDUSTRIES LTD., WHEREIN THE HON'BLE APEX COURT HELD / OBSERVED AS U NDER:- 5. THE ASSESSEE MAINTAINS ITS ACCOUNTS ON A MERCAN TILE BASIS. IN ITS RETURN (REVISED ON 31ST MARCH 2003) THE ASSESSE E CLAIMED A DEDUCTION OF RS.12,57,525/- UNDER THE HEAD ADVANCE LICENCE BENEFIT RECEIVABLE. THE ASSESSEE ALSO CLAIMED A DED UCTION IN RESPECT OF DUTY ENTITLEMENT PASS BOOK BENEFIT RECEI VABLE AMOUNTING TO RS.4,46,46,976/-. THESE BENEFITS RELAT ED TO ENTITLEMENT TO IMPORT DUTY FREE RAW MATERIAL UNDER THE RELEVANT IMPORT AND EXPORT POLICY BY WAY OF REDUCTION FROM R AW MATERIAL CONSUMPTION. ACCORDING TO THE ASSESSEE, THE AMOUNTS WERE EXCLUDED FROM ITS TOTAL INCOME SINCE THEY COULD NOT BE SAID TO HAVE ACCRUED UNTIL IMPORTS WERE MADE AND THE RAW MATERIA L CONSUMED. 6. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE RELIED UPON A DECISION OF THE INCOME TAX APPELLATE TRIBUNAL IN JA MSHRI RANJITSINGHJI SPINNING AND WEAVING MILLS V. INSPECT ING ASSISTANT COMMISSIONER [1992] 41 ITD 142 (MUM) AND ALSO THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN ITS OWN CAS E FOR THE ASSESSMENT YEARS 1995-96 TO 1997-98. ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 4 7. BY HIS ORDER DATED 24TH MARCH 2004, THE ASSESSIN G OFFICER DID NOT ACCEPT THE ASSESSEES CLAIM ON THE GROUND THAT THE TAXABILITY OF SUCH BENEFITS IS COVERED BY SECTION 28(IV) OF THE I NCOME TAX ACT, 1961 (FOR SHORT THE ACT) WHICH PROVIDES THAT THE VALUE OF ANY BENEFIT OR PERQUISITE, WHETHER CONVERTIBLE INTO MON EY OR NOT, ARISING FROM A BUSINESS OR A PROFESSION IS INCOME. ACCORDING TO THE ASSESSING OFFICER, ALONG WITH AN OBLIGATION OF EXPORT COMMITMENT, THE ASSESSEE GETS THE BENEFIT OF IMPORT ING RAW MATERIAL DUTY FREE. WHEN EXPORTS ARE MADE, THE OBLI GATION OF THE ASSESSEE IS FULFILLED AND THE RIGHT TO RECEIVE THE BENEFIT BECOMES VESTED AND ABSOLUTE, AT THE END OF THE YEAR. IN THE YEAR UNDER CONSIDERATION, THE EXPORT OBLIGATION HAD BEEN MADE AND THE ACCOUNTING ENTRIES WERE BASED ON SUCH FULFILMENT. T HE ASSESSING OFFICER DISTINGUISHED JAMSHRI ON THE GROUND THAT IT PERTAINED TO THE ASSESSMENT YEAR 1985-86 WHEN THE EXPORT PROMOTI ON SCHEME WAS TOTALLY DIFFERENT AND THE TAXABILITY OF SUCH A BENEFIT WAS EXAMINED ONLY WITH REFERENCE TO SECTION 28(IV) OF T HE ACT BUT IN THE PRESENT CASE THE TAXABILITY OF SUCH BENEFIT IS TO BE EXAMINED FROM ALL POSSIBLE ANGLES AS IT FORMS PART OF THE PR OFITS AND GAINS OF BUSINESS ACCORDING TO THE ORDINARY PRINCIPLES OF COMMERCIAL ACCOUNTING. 8. THE ASSESSEE TOOK UP THE MATTER IN APPEAL AND BY AN ORDER DATED 15TH SEPTEMBER 2008 THE COMMISSIONER OF INCOM E TAX (APPEALS) REFERRED TO AN EARLIER APPELLATE ORDER IN THE CASE OF THE ASSESSEE RELEVANT TO THE ASSESSMENT YEARS 1999-2000 AND 2000- 01 AND FOLLOWING THE CONCLUSION ARRIVED AT IN THOSE ASSESSMENT YEARS, THE APPEAL WAS ALLOWED AND IT WAS HELD THAT THE ADVANCE LICENCE BENEFIT RECEIVABLE AMOUNTING TO RS.12,57,52 5/- AND DUTY ENTITLEMENT PASS BOOK BENEFIT OF RS.4,46,46,976/- O UGHT NOT TO BE TAXED IN THIS YEAR. RELIANCE WAS ALSO PLACED ON THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1995-96. 9. FEELING AGGRIEVED, THE REVENUE PREFERRED A FURTH ER APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL (FOR SHORT THE ITAT) WHICH REFERRED TO THE ISSUES RAISED BY THE REVENUE AND BY ITS ORDER DATED 29TH APRIL 2011 DISMISSED THE APPEAL UP HOLDING THE VIEW TAKEN BY THE COMMISSIONER OF INCOME TAX (APPEA LS). 10. THE TRIBUNAL HELD THAT THE ISSUES WERE COVERED IN FAVOUR OF THE ASSESSEE BY EARLIER ORDERS OF THE TRIBUNAL IN THE A SSESSEES OWN CASES. IT HAD BEEN HELD BY THE TRIBUNAL IN THE EARL IER CASES THAT INCOME DOES NOT ACCRUE UNTIL THE IMPORTS ARE MADE A ND RAW MATERIALS ARE CONSUMED BY THE ASSESSEE. AS REGARDS THE ACCOUNTING YEAR UNDER CONSIDERATION, IT WAS FOUND T HAT THERE WAS NO DISPUTE THAT IT WAS ONLY IN THE SUBSEQUENT YEAR THAT THE IMPORTS WERE MADE AND THE RAW MATERIALS CONSUMED BY THE ASSESSEE. ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 5 11. THE TRIBUNAL ALSO TOOK THE NOTE OF THE FACT IN THE ASSESSEES OWN CASES STARTING FROM THE ASSESSMENT YEAR 1992-93 ONW ARDS THESE ISSUES HAD BEEN CONSISTENTLY DECIDED IN ITS FAVOUR. IT WAS ALSO NOTED THAT FOR SOME OF THE ASSESSMENT YEARS NAMELY 1993-94, 1996-97 AND 1997-98 APPEALS WERE FILED BY THE REVEN UE IN THE BOMBAY HIGH COURT BUT THEY WERE NOT ADMITTED. 12. UNDER THE CIRCUMSTANCES, THE TRIBUNAL AFFIRMED THE DECISION OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THE ISSUES RAISED. 13. THE REVENUE THEN PREFERRED AN APPEAL UNDER SECT ION 260-A OF THE ACT IN RESPECT OF THE FOLLOWING SUBSTANTIAL QUE STION OF LAW: WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW ITAT IS JUSTIFIED IN LAW IN HOLDING BY FOLLOWING IT S DECISION IN THE CASE OF JAMSHRI RANJITSINGHJI SPINNING & WEAVING MI LLS LTD. (41 ITD 142), THAT ADVANCE LICENSE BENEFIT AND DEPB BEN EFITS ARE TAXABLE IN THE YEAR IN WHICH THESE ARE ACTUALLY UTI LIZED BY THE ASSESSEE AND NOT IN THE YEAR OF RECEIPTS. 14. BY THE IMPUGNED ORDER, THE HIGH COURT DECLINED TO ADMIT THE APPEAL FILED BY THE REVENUE UNDER SECTION 260-A OF THE ACT. 15. IT WAS SUBMITTED BEFORE US BY LEARNED COUNSEL F OR THE REVENUE THAT IN VIEW OF THE PROVISIONS OF SECTION 28(IV) OF THE ACT, THE VALUE OF THE BENEFIT OBTAINED BY THE ASSESSEE IS IT S INCOME AND IS LIABLE TO TAX UNDER THE HEAD PROFITS AND GAINS OF B USINESS OR PROFESSION. WE ARE UNABLE TO ACCEPT THE CONTENTION OF LEARNED COUNSEL FOR THE REVENUE FOR SEVERAL REASONS. 16. SECTION 28 (IV) OF THE ACT READS AS FOLLOWS:- PROFITS AND GAINS OF BUSINESS OR PROFESSION. 28. THE FOLLOWING INCOME SHALL BE CHARGEABLE TO INC OME-TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSIO N - .. (IV) THE VALUE OF ANY BENEFIT OR PERQUISITE, WHETHE R CONVERTIBLE INTO MONEY OR NOT, ARISING FROM BUSINESS OR THE EXE RCISE OF A PROFESSION; 17. FIRST OF ALL, IT IS NOW WELL SETTLED THAT INCOM E TAX CANNOT BE LEVIED ON HYPOTHETICAL INCOME. IN COMMISSIONER OF I NCOME TAX V. SHOORJI VALLABHDAS AND CO., [1962] 46 ITR 144 (SC) IT WAS HELD AS FOLLOWS:- INCOME-TAX IS A LEVY ON INCOME. NO DOUBT, THE INCO ME-TAX ACT TAKES INTO ACCOUNT TWO POINTS OF TIME AT WHICH THE LIABILITY TO ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 6 TAX IS ATTRACTED, VIZ., THE ACCRUAL OF THE INCOME O R ITS RECEIPT; BUT THE SUBSTANCE OF THE MATTER IS THE INCOME. IF INCOM E DOES NOT RESULT AT ALL, THERE CANNOT BE A TAX, EVEN THOUGH I N BOOK-KEEPING, AN ENTRY IS MADE ABOUT A HYPOTHETICAL INCOME, WHI CH DOES NOT MATERIALISE. WHERE INCOME HAS, IN FACT, BEEN RECEIV ED AND IS SUBSEQUENTLY GIVEN UP IN SUCH CIRCUMSTANCES THAT IT REMAINS THE INCOME OF THE RECIPIENT, EVEN THOUGH GIVEN UP, THE TAX MAY BE PAYABLE. WHERE, HOWEVER, THE INCOME CAN BE SAID NOT TO HAVE RESULTED AT ALL, THERE IS OBVIOUSLY NEITHER ACCRUAL NOR RECEIPT OF INCOME, EVEN THOUGH AN ENTRY TO THAT EFFECT MIGHT, IN CERTAIN CIRCUMSTANCES, HAVE BEEN MADE IN THE BOOKS OF ACCOU NT. 18. THE ABOVE PASSAGE WAS CITED WITH APPROVAL IN MO RVI INDUSTRIES LTD. V. COMMISSIONER OF INCOME-TAX (CENT RAL), [1971] 82 ITR 835 (SC) IN WHICH THIS COURT ALSO CONSIDERED THE DICTIONARY MEANING OF THE WORD ACCRUE AND HELD TH AT INCOME CAN BE SAID TO ACCRUE WHEN IT BECOMES DUE. IT WAS T HEN OBSERVED THAT: ........ THE DATE OF PAYMENT ....... DOES NO T AFFECT THE ACCRUAL OF INCOME. THE MOMENT THE INCOME ACCRUES, THE ASSESSEE GETS VESTED WITH THE RIGHT TO CLAIM THAT AMOUNT EVEN THOUGH IT MAY NOT BE IMMEDIATELY. 19. THIS COURT FURTHER HELD, AND IN OUR OPINION MOR E IMPORTANTLY, THAT INCOME ACCRUES WHEN THERE ARISES A CORRESPOND ING LIABILITY OF THE OTHER PARTY FROM WHOM THE INCOME BECOMES DUE TO PAY THAT AMOUNT. 20. IT FOLLOWS FROM THESE DECISIONS THAT INCOME ACC RUES WHEN IT BECOMES DUE BUT IT MUST ALSO BE ACCOMPANIED BY A CO RRESPONDING LIABILITY OF THE OTHER PARTY TO PAY THE AMOUNT. ONLY THEN CAN IT BE SAID THAT FOR THE PURPOSES OF TAXABILITY THAT THE I NCOME IS NOT HYPOTHETICAL AND IT HAS REALLY ACCRUED TO THE ASSES SEE. 21. IN SO FAR AS THE PRESENT CASE IS CONCERNED, EVE N IF IT IS ASSUMED THAT THE ASSESSEE WAS ENTITLED TO THE BENEFITS UNDE R THE ADVANCE LICENCES AS WELL AS UNDER THE DUTY ENTITLEMENT PASS BOOK, THERE WAS NO CORRESPONDING LIABILITY ON THE CUSTOMS AUTHO RITIES TO PASS ON THE BENEFIT OF DUTY FREE IMPORTS TO THE ASSESSEE UNTIL THE GOODS ARE ACTUALLY IMPORTED AND MADE AVAILABLE FOR CLEARA NCE. THE BENEFITS REPRESENT, AT BEST, A HYPOTHETICAL INCOME WHICH MAY OR MAY NOT MATERIALISE AND ITS MONEY VALUE IS THEREFOR E NOT THE INCOME OF THE ASSESSEE. 22. IN GODHRA ELECTRICITY CO. LTD. V. COMMISSIONER OF INCOME TAX, [1997] 225 ITR 746 (SC) THIS COURT REITERATED THE VIEW TAKEN IN SHOORJI VALLABHDAS AND MORVI INDUSTRIES. 23. GODHRA ELECTRICITY IS RATHER INSTRUCTIVE. IN TH AT CASE, IT WAS NOTED THAT THE HIGH COURT HELD THAT THE ASSESSEE WO ULD BE OBLIGED ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 7 TO PAY TAX WHEN THE PROFIT BECAME ACTUALLY DUE AND THAT INCOME COULD NOT BE SAID TO HAVE ACCRUED WHEN IT IS BASED ON A MERE CLAIM NOT BACKED BY ANY LEGAL OR CONTRACTUAL RIGHT TO RECEIVE THE AMOUNT AT A SUBSEQUENT DATE. THE HIGH COURT HOWEVER HELD ON THE FACTS OF THE CASE THAT THE ASSESSEE HAD A LEGAL RIGHT TO RECOVER THE CONSUMPTION CHARGE IN DISPUTE AT THE ENHANCED R ATE FROM THE CONSUMERS. 24. THIS COURT DID NOT ACCEPT THE VIEW TAKEN BY THE HIGH COURT ON FACTS. REFERENCE WAS MADE IN THIS CONTEXT TO COMMIS SIONER OF INCOME TAX V. BIRLA GWALIOR (P.) LTD., [1973] 89 IT R 266 (SC) WHEREIN IT WAS HELD, AFTER REFERRING TO MORVI INDUS TRIES THAT REAL ACCRUAL OF INCOME AND NOT A HYPOTHETICAL ACCRUAL OF INCOME OUGHT TO BE TAKEN INTO CONSIDERATION. FOR A SIMILAR CONCL USION, REFERENCE WAS MADE TO POONA ELECTRIC SUPPLY CO. LTD. V. COMMIS SIONER OF INCOME TAX, [1965] 57 ITR 521 (SC) WHEREIN IT WAS H ELD THAT INCOME TAX IS A TAX ON REAL INCOME. 25. FINALLY A REFERENCE WAS MADE TO STATE BANK OF T RAVANCORE V. COMMISSIONER OF INCOME TAX, [1986] 158 ITR 102 (SC) WHEREIN THE MAJORITY VIEW WAS THAT ACCRUAL OF INCOME MUST B E REAL, TAKING INTO ACCOUNT THE ACTUALITY OF THE SITUATION; WHETHE R THE ACCRUAL HAD TAKEN PLACE OR NOT MUST, IN APPROPRIATE CASES, BE JUDGED ON THE PRINCIPLES OF REAL INCOME THEORY. THE MAJORITY OPINION WENT ON TO SAY: WHAT HAS REALLY ACCRUED TO THE ASSESSEE HAS TO BE FOUND OUT AND WHAT HAS ACCRUED MUST BE CONSIDERED FROM THE POINT OF VIEW OF REAL INCOME TAKING THE PROBABILITY OR IMPROBABILITY OF REALISATION IN A REALISTIC MANNER AND DOVETAILING OF THESE FACT ORS TOGETHER BUT ONCE THE ACCRUAL TAKES PLACE, ON THE CONDUCT OF THE PARTIES SUBSEQUENT TO THE YEAR OF CLOSING AN INCOME WHICH H AS ACCRUED CANNOT BE MADE NO INCOME. 26. THIS COURT THEN CONSIDERED THE FACTS OF THE CAS E AND CAME TO THE CONCLUSION (IN GODHRA ELECTRICITY) THAT NO REAL INCOME HAD ACCRUED TO THE ASSESSEE IN RESPECT OF THE ENHANCED CHARGES FOR A VARIETY OF REASONS. ONE OF THE REASONS SO CONSIDERED WAS A LETTER ADDRESSED BY THE UNDER SECRETARY TO THE GOVERNMENT OF GUJARAT, TO THE ASSESSEE WHEREBY THE ASSESSEE WAS ADVISED TO MAINTAIN STATUS QUO IN RESPECT OF ENHANCED CHARGES FOR AT LE AST SIX MONTHS. THIS COURT TOOK THE VIEW THAT THOUGH THE LETTER HAD NO LEGAL BINDING EFFECT BUT ONE HAS TO LOOK AT THINGS FROM A PRACTICAL POINT OF VIEW. (SEE R.B. JODHA MAL KUTHIALA V. COMMISSIO NER OF INCOME TAX, [1971] 82 ITR 570 (SC)). THIS COURT TOO K THE VIEW THAT THE PROBABILITY OR IMPROBABILITY OF REALISATIO N HAS TO BE CONSIDERED IN A REALISTIC MANNER AND IT WAS HELD TH AT THERE WAS NO REAL ACCRUAL OF INCOME TO THE ASSESSEE IN RESPEC T OF THE DISPUTED ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 8 ENHANCED CHARGES FOR SUPPLY OF ELECTRICITY. THE DEC ISION OF THE HIGH COURT WAS, ACCORDINGLY, SET ASIDE. 27. APPLYING THE THREE TESTS LAID DOWN BY VARIOUS D ECISIONS OF THIS COURT, NAMELY, WHETHER THE INCOME ACCRUED TO THE AS SESSEE IS REAL OR HYPOTHETICAL; WHETHER THERE IS A CORRESPONDING L IABILITY OF THE OTHER PARTY TO PASS ON THE BENEFITS OF DUTY FREE IM PORT TO THE ASSESSEE EVEN WITHOUT ANY IMPORTS HAVING BEEN MADE; AND THE PROBABILITY OR IMPROBABILITY OF REALISATION OF THE BENEFITS BY THE ASSESSEE CONSIDERED FROM A REALISTIC AND PRACTICAL POINT OF VIEW (THE ASSESSEE MAY NOT HAVE MADE IMPORTS), IT IS QUI TE CLEAR THAT IN FACT NO REAL INCOME BUT ONLY HYPOTHETICAL INCOME HA D ACCRUED TO THE ASSESSEE AND SECTION 28(IV) OF THE ACT WOULD BE INAPPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. ESSENTIALL Y, THE ASSESSING OFFICER IS REQUIRED TO BE PRAGMATIC AND NOT PEDANTI C. 28. SECONDLY, AS NOTED BY THE TRIBUNAL, A CONSISTEN T VIEW HAS BEEN TAKEN IN FAVOUR OF THE ASSESSEE ON THE QUESTIONS RA ISED, STARTING WITH THE ASSESSMENT YEAR 1992-93, THAT THE BENEFITS UNDER THE ADVANCE LICENCES OR UNDER THE DUTY ENTITLEMENT PASS BOOK DO NOT REPRESENT THE REAL INCOME OF THE ASSESSEE. CONSEQUE NTLY, THERE IS NO REASON FOR US TO TAKE A DIFFERENT VIEW UNLESS TH ERE ARE VERY CONVINCING REASONS, NONE OF WHICH HAVE BEEN POINTED OUT BY THE LEARNED COUNSEL FOR THE REVENUE. 29. IN RADHASOAMI SATSANG SAOMI BAGH V. COMMISSIONE R OF INCOME TAX, [1992] 193 ITR 321 (SC) THIS COURT DID NOT THINK IT APPROPRIATE TO ALLOW THE RECONSIDERATION OF AN ISSU E FOR A SUBSEQUENT ASSESSMENT YEAR IF THE SAME FUNDAMENTAL ASPECT PERMEATES IN DIFFERENT ASSESSMENT YEARS. IN ARRIVIN G AT THIS CONCLUSION, THIS COURT REFERRED TO AN INTERESTING P ASSAGE FROM HOYSTEAD V. COMMISSIONER OF TAXATION, 1926 AC 155 ( PC) WHEREIN IT WAS SAID: PARTIES ARE NOT PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS THEY MAY ENTERTAIN OF THE LAW OF THE CASE, OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE A PROPER AP PREHENSION BY THE COURT OF THE LEGAL RESULT EITHER OF THE CONS TRUCTION OF THE DOCUMENTS OR THE WEIGHT OF CERTAIN CIRCUMSTANCES. I F THIS WERE PERMITTED, LITIGATION WOULD HAVE NO END, EXCEPT WHE N LEGAL INGENUITY IS EXHAUSTED. IT IS A PRINCIPLE OF LAW TH AT THIS CANNOT BE PERMITTED AND THERE IS ABUNDANT AUTHORITY REITERATI NG THAT PRINCIPLE. THIRDLY, THE SAME PRINCIPLE, NAMELY, THA T OF SETTING TO REST RIGHTS OF LITIGANTS, APPLIES TO THE CASE WHERE A POINT, FUNDAMENTAL TO THE DECISION, TAKEN OR ASSUMED BY TH E PLAINTIFF AND TRAVERSABLE BY THE DEFENDANT, HAS NOT BEEN TRAV ERSED. IN THAT CASE ALSO A DEFENDANT IS BOUND BY THE JUDGMENT, ALT HOUGH IT MAY BE TRUE ENOUGH THAT SUBSEQUENT LIGHT OR INGENUITY M IGHT SUGGEST SOME TRAVERSE WHICH HAD NOT BEEN TAKEN. ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 9 30. REFERENCE WAS ALSO MADE TO PARASHURAM POTTERY WOR KS LTD. V. INCOME TAX OFFICER, [1977] 106 ITR 1 (SC) AND TH EN IT WAS HELD: WE ARE AWARE OF THE FACT THAT STRICTLY SPEAKING RE S JUDICATA DOES NOT APPLY TO INCOME-TAX PROCEEDINGS. AGAIN, EACH AS SESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT P ERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOU ND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NO T BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. ON THESE REASONINGS IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW OF THE MATTER AND IF THERE WAS NO CHANGE IT WAS IN SUPPORT OF THE ASSESSEE WE DO NOT THINK THE QUESTION SHOULD HAVE BEEN REOPENED AND CONTRARY TO WHAT HAD BEEN DECIDED BY THE COMMISSION ER OF INCOME TAX IN THE EARLIER PROCEEDINGS, A DIFFERENT AND CONTRADICTORY STAND SHOULD HAVE BEEN TAKEN. 31. IT APPEARS FROM THE RECORD THAT IN SEVERAL ASSE SSMENT YEARS, THE REVENUE ACCEPTED THE ORDER OF THE TRIBUNAL IN F AVOUR OF THE ASSESSEE AND DID NOT PURSUE THE MATTER ANY FURTHER BUT IN RESPECT OF SOME ASSESSMENT YEARS THE MATTER WAS TAKEN UP IN APPEAL BEFORE THE BOMBAY HIGH COURT BUT WITHOUT ANY SUCCES S. THAT BEING SO, THE REVENUE CANNOT BE ALLOWED TO FLIP-FLO P ON THE ISSUE AND IT OUGHT LET THE MATTER REST RATHER THAN SPEND THE TAX PAYERS MONEY IN PURSUING LITIGATION FOR THE SAKE OF IT. 32. THIRDLY, THE REAL QUESTION CONCERNING US IS THE YEAR IN WHICH THE ASSESSEE IS REQUIRED TO PAY TAX. THERE IS NO DI SPUTE THAT IN THE SUBSEQUENT ACCOUNTING YEAR, THE ASSESSEE DID MAKE I MPORTS AND DID DERIVE BENEFITS UNDER THE ADVANCE LICENCE AND T HE DUTY ENTITLEMENT PASS BOOK AND PAID TAX THEREON. THEREFO RE, IT IS NOT AS IF THE REVENUE HAS BEEN DEPRIVED OF ANY TAX. WE ARE TOLD THAT THE RATE OF TAX REMAINED THE SAME IN THE PRESENT ASSESS MENT YEAR AS WELL AS IN THE SUBSEQUENT ASSESSMENT YEAR. THEREFOR E, THE DISPUTE RAISED BY THE REVENUE IS ENTIRELY ACADEMIC OR AT BE ST MAY HAVE A MINOR TAX EFFECT. THERE WAS, THEREFORE, NO NEED FOR THE REVENUE TO CONTINUE WITH THIS LITIGATION WHEN IT WAS QUITE CLE AR THAT NOT ONLY WAS IT FRUITLESS (ON MERITS) BUT ALSO THAT IT MAY N OT HAVE ADDED ANYTHING MUCH TO THE PUBLIC COFFERS. 33. FOR THE AFORESAID REASONS, WE DISMISS THE CIVIL APPEALS WITH NO ORDER AS TO COSTS, BUT WITH THE HOPE THAT THE RE VENUE IMPLEMENTS ITS LITIGATION POLICY A LITTLE MORE PRAC TICALLY AND A LITTLE MORE SERIOUSLY. ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 10 6.1. IT IS NOTED THAT THE ASSESSING OFFICER MADE AD DITION OF RS.2,06,73,054/- REPRESENTING VARIOUS INVOICES RAIS ED BY THE ASSESSEE ON HIS CLIENTS IN THE MONTH OF APRIL 2 009. THESE RECEIPTS WERE ACCOUNTED FOR IN THE RELEVANT P REVIOUS YEARS OF A.Y.2010-11, MEANING THEREBY THE INCOME HA S ALREADY ACCOUNTED FOR IN THE SUBSEQUENT ASSESSMENT YEAR. THE CLAIM OF THE ASSESSEE IS THAT THE REVENUE IS RE COGNIZED ONLY AT A STAGE WHERE THERE IS CERTAINTY OF REALIZA TION OF INCOME. IT IS NOTED THAT THERE IS NO UNDUE BENEFIT DERIVED BY THE ASSESSEE IN ACCOUNTING FOR CERTAIN INVOICES IN SUBSEQUENT YEAR. OUR VIEW FINDS SUPPORT FROM THE DE CISION FROM HON'BLE APEX COURT IN CIT VS. EXCEL INDUSTRIES LTD., THE TAX RATE IN BOTH THE YEARS IS SAME, THUS, WE FI ND NO INFIRMITY IN THE CONCLUSION OF THE LEARNED CIT(A). FINALLY, BOTH THE APPEALS OF THE REVENUE ARE DISMIS SED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 15/03/2017. SD/- SD/- ( N.K.PRADHAN ) (JOGINDER SINGH) #'$ / ACCOUNTANT MEMBER %'$ /JUDICIAL MEMBER % & MUMBAI; * DATED : 15 /03/2017 TT? FA P.S/. ITA NO. 4135/MUM/2015 & 4136/MUM/2015 DELOITTE CORPORATE FINANCE SERVICE INDIA PVT. LTD., 11 &%'()*)+' / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT (RESPECTIVE ASSESSEE) 2. /-. / THE RESPONDENT. 3. 0 0 % 1$ ( +, ) / THE CIT, MUMBAI. 4. 0 0 % 1$ / CIT(A)- , MUMBAI, 5. 3!4 $ , 0 +,( + 5 , % & / DR, ITAT, MUMBAI 6. 6' & / GUARD FILE. ' / BY ORDER, /3,$ $ //TRUE COPY// /' (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI