M/S. MITSU INDUSTRIES LTD. vs. JT. COMMISSIONER OF INCOME TAX(ASSTT.)

Facts

The assessee, M/s. Mitsu Industries Ltd., filed its return of income for Assessment Year 1995-96, showing an export benefit receivable of Rs. 85,52,950/- and claiming a deduction. The Assessing Officer rejected this claim and added the amount to the assessee's total income. The CIT(A) upheld this addition. The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'D', in its order dated 05.05.2006, dismissed the assessee's appeal, confirming the addition. The assessee then filed a Tax Appeal before the High Court of Gujarat at Ahmedabad, challenging the ITAT's order.

Held

The High Court allowed the Tax Appeal, answering the substantial question of law in favour of the assessee. The Court noted that the issue was squarely covered by the Supreme Court's decision in Commissioner of Income-tax v. Excel Industries Ltd. (358 ITR 295). Furthermore, the Court referred to its own prior decision in the assessee's own case, Mitsu Industries Limited vs. Asstt. Commissioner of Income Tax (Tax Appeal No. 1879 of 2005), where the same question was answered in favour of the assessee. Consequently, the High Court set aside the impugned judgment and order passed by the ITAT. No specific amount was directed to be deleted or added, but the appeal was allowed, implying the addition made by the revenue would be deleted.

Key Issues

1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in concluding that the alleged notional income from export benefit receivable amounting to Rs. 85,52,950/- has accrued as taxable income for the assessment year under consideration? Assessee's contention: The assessee argued that the issue is no longer res integra in light of the Supreme Court's decision in Commissioner of Income-tax v. Excel Industries Ltd. (358 ITR 295). The assessee also referred to a previous decision of the same High Court in its own case, Mitsu Industries Limited vs. Asstt. Commissioner of Income Tax (Tax Appeal No. 1879 of 2005), dated 13.11.2014, which allowed the appeal based on the Excel Industries Ltd. judgment. Revenue's contention: The judgment does not record any specific arguments made by the revenue.