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“right to receive”

Judicial DoctrinesAccrualAccrual601 judgments

The decision most relied on for right to receive is CIT v. Excel Industries Ltd. (358 ITR 295), cited in 935 judgments on BharatTax.

Leading authorities on right to receive

CIT v. Excel Industries Ltd.
358 ITR 295 · 2013 · Supreme Court
935
citing judgments

When an income or expenditure is revenue neutral across different assessment years, where any benefit derived is offset by a corresponding liability or reversal, no additional tax liability arises, particularly concerning income recognition under the mercantile system of accounting.

E.D. Sassoon & Co. Ltd. v. CIT
26 ITR 27 · 1954 · Supreme Court
256
citing judgments

Income is taxable only when it represents real income, not notional income. It accrues only when there is a vested right to receive it, typically upon the occurrence of a transfer or event, rather than merely on a time basis.

State Bank of Travancore v. CIT
158 ITR 102 · 1986 · Supreme Court
222
citing judgments

Under the mercantile system of accounting, interest income accrues and is taxable in the year it arises, even for "sticky" or doubtful loans, as the right to receive the income is paramount, not its actual receipt, provided there is an agreement for payment.

Mysore Minerals Ltd. v. CIT
239 ITR 775 · 1999 · Supreme Court
215
citing judgments

For income tax purposes, the 'owner' of a property is the person who is entitled to receive income in their own right, bears the risks incidental to ownership, and utilizes the asset, even if the sale deed is not formally registered. This beneficial ownership is sufficient for claiming depreciation or capital gains exemption under relevant sections.

CIT v. Sitaldas Tirathdas
41 ITR 367 · 1961 · Supreme Court
146
citing judgments

Income is diverted by an overriding charge, and thus not taxable, when it never truly accrues to the assessee due to a prior obligation. Conversely, income that first accrues to the assessee and is then applied to discharge an obligation out of that income is taxable.

CIT v. D.P. Sandhu & Bros.
273 ITR 1 · 2005 · Supreme Court
140
citing judgments

Surrender of tenancy rights is a transfer of a capital asset, and the consideration received is a capital receipt subject to capital gains tax. If the cost of acquisition cannot be determined, the transfer of such an asset was not taxable under capital gains prior to the amendment of Section 55(2) in 1995.

Morvi Industries Ltd. v. CIT
82 ITR 835 · 1971 · Supreme Court
136
citing judgments

Income accrues when it becomes due, vesting the assessee with the right to claim the amount, even if payment is not immediate. It requires a corresponding liability from the other party to pay, emphasizing real rather than hypothetical accrual, particularly for assessees using the mercantile system of accounting.

CIT v. Vasisth Chay Vyapar Ltd.
330 ITR 440 · 2011 · High Court
125
citing judgments

Interest income is taxable under the mercantile system of accounting even if it is not actually recovered, provided there is a right to receive it. The decision also touches upon the treatment of bad debts and provisions for doubtful debts under Section 36(1)(viia).

Judgments citing right to receive

Suvidha Buildtech Pvt Ltd, Delhi vs. ACIT Central Circle-13, Delhi

In the result, both the appeals of the assessee are dismissed

ITA 1366/DEL/2023[2013-14]Status: DisposedITAT Delhi02 Aug 2024AY 2013-14

Bench: Shri M. Balaganesh & Shri Anubhav Sharma

For Appellant: NoneFor Respondent: Shri N. K. Bansal, Sr. DR
Section 153CSection 153D

said commission in the hands of the appellant company which are artificial juridical persons, either the appellant company should have legal right to receive such part of commission (then, it 'accrues' to the appellant company) or some part the said commission should become property of the company

Suvidha Buildtech Pvt Ltd, Delhi vs. ACIT Central Circle-13, Delhi

In the result, both the appeals of the assessee are dismissed

ITA 1365/DEL/2023[2012-13]Status: DisposedITAT Delhi02 Aug 2024AY 2012-13

Bench: Shri M. Balaganesh & Shri Anubhav Sharma

For Appellant: NoneFor Respondent: Shri N. K. Bansal, Sr. DR
Section 153CSection 153D

said commission in the hands of the appellant company which are artificial juridical persons, either the appellant company should have legal right to receive such part of commission (then, it 'accrues' to the appellant company) or some part the said commission should become property of the company

Huntsman Investments (Netherlands), Mumbai vs. The Dy Commissioner of Income Tax International Tax Circle-2(2)(2), Mumbai

ITA 4222/MUM/2023[2021-22]Status: DisposedITAT Mumbai31 Jul 2024AY 2021-22

Bench: Shri Anikesh Banerjee & Miss. Padmavathy S.

Section 143(3)Section 144C(13)Section 144C(5)Section 234ASection 234B

agreement of share purchase dated 28/29.10.2020. Hence, in this case, the amount of total consideration is ascertained amount and thus the assessee has right to received the amount from the buyer. The test of accrual is whether there is a right to receive the amount though later and such right ... Sellers on the Closing Date the Sale Shares free from all Encumbrances and with all rights then attaching to such shares including the right to receive all distributions and dividends declared, paid or made in respect of such shares after the Closing Date. The Actual Consideration shall be paid

Asst. Commissioner of Income Tax, Circle-8(1), Hyderabad vs. Lakshmi Narayana Turairao, Hyderabad

In the result, the appeal of the revenue is dismissed

ITA 232/HYD/2020[2008-09]Status: DisposedITAT Hyderabad30 Jul 2024AY 2008-09

Bench: Shri Laliet Kumar & Shri Madhusudan Sawdia

For Appellant: Shri S. Rama Rao, AdvocateFor Respondent: : Shri Shakeer Ahmed, DR
Section 143(3)Section 2(14)Section 54B

developer during the assessment year under consideration, viz., 2003- 04, for construction and it is enough if the assessee has received the right to receive consideration on a later date, so as to attract eligibility to tax on capital gains during the year under appeal. The definition of transfer under

Deputy Commissioner of Income Tax, Circle- 4(1)(1), Bangalore vs. Ramesh Narayana Reddy (HUF), Bangalore

ITA 720/BANG/2024[2020-21]Status: DisposedITAT Bangalore30 Jul 2024AY 2020-21

Bench: Shri Chandra Poojari & Shri Prakash Chand Yadavdcit, Circle - 4(1)(1) Ramesh Narayana Reddy (Huf) Room No. 230, 2Nd Floor #62, Sonnenahalli Bmtc Building, Koramangala Vs. Mahadevapura Bangalore 560095 Bangalore 560048 Pan – Aamhr4231A (Appellant) (Respondent) Assessee By: Shri V. Srinivasan, Advocate Revenue By: Shri Subramanian S., Jcit-Dr Date Of Hearing: 24.07.2024 Date Of Pronouncement: 30.07.2024 O R D E R Per: Prakash Chand Yadav, J.M. The Present Appeal Of The Revenue Challenges The Din & Order No. Itba/Nfac/S/2003-24/1061428431(1) Of The National Faceless Appeal Centre, Delhi [Cit(A)] Dated 23.02.2024 Passed Under Section 250 Of The Income Tax Act, 1961 (The Act) In Respect Of Assessment Year (Ay) 2020-21. 2. Aggrieved With The Order Of The Ld. Cit(A) The Revenue Has Come Up In Appeal Before Us & Raised The Following Grounds: - “The Ld. Addl. Cit(A) Has Erred In Deleting The Addition Of Rs. 1,18,01,752 As Deemed Rental Income On The Ground That There Was No Addition Made In The Case Of Other Two Co-Owners Of The Same Property For The Same Assessment Year. The Nfac Has Not Considered That The Assessments Of Three Different Co-Owners Were Completed In Faceless Manner. There Is No Algorithm For Allocation Of Cases Of Three Different Assessees Having Common Interest In A Single Property To A Single Assessing Officer For Assessment. Hence, Omission Of Addition In Cases Of Other Two Co-Owners Of The Property Wherein Assesses Is An Owner May Be Because

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Shri Subramanian S., JCIT-DR
Section 194Section 250

bodies/courts to bring similarity of opinion. ➤ The Ld. NFAC has erred on facts and circumstance of the case in not considering that the right to receive asset as per JDA is a fictitious capital asset moreover it is guarantee to receive the asset in future. It cannot be termed ... during 1960 and profit attributable to land is long term. Regarding construction value, your good self is aware that we have acquired the right to receive flats when Joint development agreements were entered. One was entered on 15-12-2010 and other was entered on 19.06.2013 Right to receive asset

Mildred Ponnoth, Mumbai vs. Income Tax Officer (International Tax)-3(3)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 1802/MUM/2024[2016-17]Status: DisposedITAT Mumbai30 Jul 2024AY 2016-17

Bench: MS.KAVITHA RAJAGOPAL (Judicial Member), SMT RENU JAUHRI (Accountant Member)

Section 143(1)Section 144Section 144C(5)Section 147Section 148Section 148ASection 234A

other sources by holding that - "7. From the above, it is clear, that the receipt by assessee of Rs 53,50,000/- (or right to receive) by whatever name is nothing but monetary compensation by the builder which is given to the assessee to alleviate her difficulties or hard ship

Ndtv Worldwide Ltd, New Delhi vs. DCIT 18(1), New Delhi

ITA 1180/DEL/2019[2014-15]Status: DisposedITAT Delhi29 Jul 2024AY 2014-15

Bench: Shri G.S. Pannu & Shri Anubhav Sharmandtv Worldwide Ltd, Vs. Dcit, Okhla Industrial Estate, Circle-18(1), Phase-Ii, New Delhi New Delhi (Appellant) (Respondent) Pan: Aaccn9121G

For Appellant: Shri Rohit Tiwari, Ms Tanya &For Respondent: Shri Sandeep K Mishra &
Section 1Section 142Section 143Section 143(3)Section 2Section 3

that full value of consideration received or accruing means the amount which is received or in respect of which the right to receive his accrued. Hence, charge created by section 45(1) gets triggered immediately on transfer of the capital asset and is relevant for the year in which ... only on such income which has been received or accrued when it is based on and backed by any legal or contractual right to receive the amount at a subsequent date. Further judgments in this regards can be noted as CIT vs. Shoorji Vallabhdas

JCIT (OSD) Circle- 16(2), New Delhi vs. Mayar Health Resorts Pvt. Ltd., New Delhi

In the result, the appeals of the assessee are partly allowed and the appeal of the Revenue is partly allowed

ITA 3548/DEL/2018[2011-12]Status: DisposedITAT Delhi29 Jul 2024AY 2011-12

Bench: Dr. B. R. R. Kumar, Sh. Sudhir Kumar

For Appellant: Sh. Raghav Sharma, CA &For Respondent: Sh. Anshul, Sr. DR
Section 143(3)Section 145(2)Section 145(3)Section 209Section 35D(2)(c)

case of assessee. 7. That the learned CIT(A) had acted against the law and facts by incorrectly holding that assessee acquire a right to received the 8 membership fees and the amount received by appellant in its own right and there was a debt incurred by the payers ... case of assessee. 6. That the learned CIT(A) had acted against the law and facts by Incorrectly holding that assessee acquire a right to received the membership fees and the amount received by appellant in its own right and there was a debt incurred by the payers in favour

Mayar Health Resorts Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeals of the assessee are partly allowed and the appeal of the Revenue is partly allowed

ITA 326/DEL/2015[2010-11]Status: DisposedITAT Delhi29 Jul 2024AY 2010-11

Bench: Dr. B. R. R. Kumar, Sh. Sudhir Kumar

For Appellant: Sh. Raghav Sharma, CA &For Respondent: Sh. Anshul, Sr. DR
Section 143(3)Section 145(2)Section 145(3)Section 209Section 35D(2)(c)

case of assessee. 7. That the learned CIT(A) had acted against the law and facts by incorrectly holding that assessee acquire a right to received the 8 membership fees and the amount received by appellant in its own right and there was a debt incurred by the payers ... case of assessee. 6. That the learned CIT(A) had acted against the law and facts by Incorrectly holding that assessee acquire a right to received the membership fees and the amount received by appellant in its own right and there was a debt incurred by the payers in favour

Mayar Health Resorts Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeals of the assessee are partly allowed and the appeal of the Revenue is partly allowed

ITA 6228/DEL/2013[2009-10]Status: DisposedITAT Delhi29 Jul 2024AY 2009-10

Bench: Dr. B. R. R. Kumar, Sh. Sudhir Kumar

For Appellant: Sh. Raghav Sharma, CA &For Respondent: Sh. Anshul, Sr. DR
Section 143(3)Section 145(2)Section 145(3)Section 209Section 35D(2)(c)

case of assessee. 7. That the learned CIT(A) had acted against the law and facts by incorrectly holding that assessee acquire a right to received the 8 membership fees and the amount received by appellant in its own right and there was a debt incurred by the payers ... case of assessee. 6. That the learned CIT(A) had acted against the law and facts by Incorrectly holding that assessee acquire a right to received the membership fees and the amount received by appellant in its own right and there was a debt incurred by the payers in favour

Mayar Health Resorts Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeals of the assessee are partly allowed and the appeal of the Revenue is partly allowed

ITA 5109/DEL/2012[2008-09]Status: DisposedITAT Delhi29 Jul 2024AY 2008-09

Bench: Dr. B. R. R. Kumar, Sh. Sudhir Kumar

For Appellant: Sh. Raghav Sharma, CA &For Respondent: Sh. Anshul, Sr. DR
Section 143(3)Section 145(2)Section 145(3)Section 209Section 35D(2)(c)

case of assessee. 7. That the learned CIT(A) had acted against the law and facts by incorrectly holding that assessee acquire a right to received the 8 membership fees and the amount received by appellant in its own right and there was a debt incurred by the payers ... case of assessee. 6. That the learned CIT(A) had acted against the law and facts by Incorrectly holding that assessee acquire a right to received the membership fees and the amount received by appellant in its own right and there was a debt incurred by the payers in favour

Andhra Pradesh Advocates Welfare Fund, Hyderabad vs. Income Tax Officer, Ward-8(2), Hyderabad

In the result, all the three appeals of the assessee are dismissed

ITA 664/HYD/2023[2018-19]Status: DisposedITAT Hyderabad24 Jul 2024AY 2018-19

Bench: SHRI K.NARASIMHA CHARY (Judicial Member), SHRI MADHUSUDAN SAWDIA (Accountant Member)

For Appellant: Shri P.R. Suresh, C.AFor Respondent: Shri Kumar Pranav, CIT(DR) &
Section 23Section 3

contributor, it was not a beneficiary of the surplus. Pepsi Foods Ltd. was not a franchisee and thus had no right to receive back any surplus. This lack of entitlement of Pepsi Foods Ltd. to participate in the surplus breached the principle of complete identity. The Court noted that

Andhra Pradesh Advocates Welfare Fund, Hyderabad vs. Income Tax Officer, Ward 8(2), Hyderabad

In the result, all the three appeals of the assessee are dismissed

ITA 663/HYD/2023[2017-18]Status: DisposedITAT Hyderabad24 Jul 2024AY 2017-18

Bench: SHRI K.NARASIMHA CHARY (Judicial Member), SHRI MADHUSUDAN SAWDIA (Accountant Member)

For Appellant: Shri P.R. Suresh, C.AFor Respondent: Shri Kumar Pranav, CIT(DR) &
Section 23Section 3

contributor, it was not a beneficiary of the surplus. Pepsi Foods Ltd. was not a franchisee and thus had no right to receive back any surplus. This lack of entitlement of Pepsi Foods Ltd. to participate in the surplus breached the principle of complete identity. The Court noted that

Andhra Pradesh Advocates Welfare Fund, Hyderabad vs. Income Tax Officer, Ward 8(2), Hyderabad

In the result, all the three appeals of the assessee are dismissed

ITA 662/HYD/2023[2016-17]Status: DisposedITAT Hyderabad24 Jul 2024AY 2016-17

Bench: SHRI K.NARASIMHA CHARY (Judicial Member), SHRI MADHUSUDAN SAWDIA (Accountant Member)

For Appellant: Shri P.R. Suresh, C.AFor Respondent: Shri Kumar Pranav, CIT(DR) &
Section 23Section 3

contributor, it was not a beneficiary of the surplus. Pepsi Foods Ltd. was not a franchisee and thus had no right to receive back any surplus. This lack of entitlement of Pepsi Foods Ltd. to participate in the surplus breached the principle of complete identity. The Court noted that

Cap Gemini Technology Services India Limited(Formerly Known As Igate Global Solution Limited)-M/S Patni Telecom Solutions Pvt Ltd, Changed Name to M/S.Igate Information Services Private Limited Merged With Igate Global Solutions Limited, Hyderabad vs. ITO, Ward - 2(1), Hyderabad

In the result, appeal raised by the assessee is dismissed

ITA 446/HYD/2015[2010-11]Status: DisposedITAT Hyderabad23 Jul 2024AY 2010-11

Bench: Shri Laliet Kumar & Shri Manjunatha, G.आ.अपी.सं /Ita No.446/Hyd/2015 (िनधा"रण वष"/Assessment Year: 2010-11) Cap Gemini Vs. Income Tax Officer Technology Services Ward 2(1) India Ltd(Formerly Igate Hyderabad Global Solutions Ltd) Hyderabad Pan:Aacca4255G (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Advocate A.V. Raghuram राज" व "ारा/Revenue By:: Shri Kumar Pranav, Cit(Dr) सुनवाई की तारीख/Date Of Hearing: 04/07/2024 घोषणा की तारीख/Pronouncement: 23/07/2024 आदेश/Order

For Appellant: Advocate A.V. RaghuramFor Respondent: : Shri Kumar Pranav, CIT(DR)
Section 10ASection 143(3)Section 92C(2)

proportion basis taking into account the amount outstanding and the rate applicable. iii. Dividends Revenue from dividend is recognised when the shareholder’s right to receive Payment is established by the balance sheet date. Dividend from subsidiaries is recognised even if such dividend is declared after the balance sheet date

Rajesh Ramesh Ranganekar, Mumbai vs. Income Tax Officer Ward 19(3)(1), Mumbai

In the result, the appeal of assessee is allowed

ITA 2157/MUM/2024[2011-12]Status: DisposedITAT Mumbai23 Jul 2024AY 2011-12

Bench: Ms Padmavathy S, Am & Shri Rahul Chaudhary, Jm

For Appellant: Shri Vijay Biyani, CAFor Respondent: Smt. Mahita Nair, Sr. DR
Section 142(1)Section 143(2)Section 148

other sources by holding that – “7. From the above, it is clear, that the receipt by assessee of Rs 53,50,000/- (or right to receive) by whatever name is nothing but monetary compensation by the builder which is given to the assessee to alleviate her difficulties or hard ship

Raoul Thackersey, Mumbai vs. DCIT 12(1), Mumbai

Appeal is partly allowed in above terms

ITA 1262/MUM/2017[2011-12]Status: DisposedITAT Mumbai22 Jul 2024AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri Girish Agrawal

For Appellant: Shri K. GopalFor Respondent: Smt. Mahita Nair, Sr. DR
Section 143(3)Section 14A

debenture holder is entitled to receive interest as per agreed terms and the principal amount upon its maturity. He does not have right to receive anything extra and cannot have any right over the surplus arising on liquidation of company. Thus the shares carry more right over and above

Deputy Commissioner of Income Tax, New Delhi vs. Kd Campus Private Limited, Mukherjee Nagar, Delhi

In the result, the appeal is dismissed

ITA 355/DEL/2024[2017-18]Status: DisposedITAT Delhi18 Jul 2024AY 2017-18

Bench: Shri Pradip Kumar Kedia & Shri Sudhir Pareekassessment Year 2017-18

For Respondent: Mr. Waseem Arshad, CIT (DR)
Section 115BSection 143(3)Section 69A

financial accounts. As per mercantile method, the receipt towards coaching fee will be regarded as chargeable income only upon its accrual i.e legal right to receive such money. Mere receipt of money/ fee would not result in its taxability unless the service against such fee received has been rendered

Assistant Commissioner of Income Tax, Circle-3(4), Mumbai vs. Union Bank of India, Mumbai

ITA 1959/MUM/2024[2016-17]Status: DisposedITAT Mumbai11 Jul 2024AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Sunil Kumar Singh ()

For Respondent: Mr. Ankush Kapoor, CIT-DR
Section 115JSection 143(3)Section 144BSection 148

amount of interest accrued but not due on securities, without appreciating that the charge to tax will arise only if there is a right to receive the income. 4.2 On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in relying

M/S Union Bank of India, Mumbai vs. Deputy Commissioner of Income Tax, Circle- Ltu 2, Mumbai

ITA 1677/MUM/2024[2016-17]Status: DisposedITAT Mumbai11 Jul 2024AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Sunil Kumar Singh ()

Section 115JSection 143(3)Section 144BSection 148

amount of interest accrued but not due on securities, without appreciating that the charge to tax will arise only if there is a right to receive the income. 4.2 On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in relying