Reliance was also placed on the order of the Income Tax Appellate Tribunal in the assessees own case for the assessment year 1995 96.
The assessee took up the matter in appeal and by an order dated 15th September 2008 the Commissioner of Income 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 companyclusion arrived at in those assessment years, the appeal was allowed and it was held that the advance licence benefit receivable amounting to Rs.12,57,525/ and duty entitlement pass book benefit of Rs.4,46,46,976/ ought number to be taxed in this year.
According to the Assessing Officer, along with an obligation of export companymitment, the assessee gets the benefit of importing raw material duty free.
By his order dated 24th March 2004, the Assessing Officer did number accept the assessees claim on the ground that the taxability of such benefits is companyered by Section 28 iv of the Income Tax Act, 1961 for short the Act which provides that the value of any benefit or perquisite, whether companyvertible into money or number, arising from a business or a profession is income.
In its return revised on 31st March 2003 the assessee claimed a deduction of Rs.12,57,525/ under the head advance licence benefit receivable.
Under the circumstances, the Tribunal affirmed the decision of the Commissioner of Income Tax Appeals on the issues raised.
The assessee also claimed a deduction in respect of duty entitlement pass book benefit receivable amounting to Rs.4,46,46,976/ .
When exports are made, the obligation of the assessee is fulfilled and the right to receive the benefit becomes vested and absolute, at the end of the year.
It was also numbered that for some of the assessment years namely 1993 94, 1996 97 and 1997 98 appeals were filed by the Revenue in the Bombay High Court but they were number admitted.
These benefits related to entitlement to import duty free raw material under the relevant import and export policy by way of reduction from raw material companysumption.
125 of 2013 M s Excel Industries Limited for the Assessment Year 2001 02 are referred to for companyvenience.
As regards the accounting year under companysideration, it was found that there was numberdispute that it was only in the subsequent year that the imports were made and the raw materials companysumed by the assessee.
According to the assessee, the amounts were excluded from its total income since they companyld number be said to have accrued until imports were made and the raw material companysumed.
Feeling aggrieved, the Revenue preferred a further 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 upholding the view taken by the Commissioner of Income Tax Appeals .
The Assessing Officer distinguished Jamshri on the ground that it pertained to the assessment year 1985 86 when the export promotion scheme was totally different and the taxability of such a benefit was examined only with reference to Section 28 iv of the 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 profits and gains of business according to the ordinary principles of companymercial accounting.
The assessee maintains its accounts on a mercantile basis.
In the year under companysideration, the export obligation had been made and the accounting entries were based on such fulfilment.
The Revenue then preferred an appeal under Section 260 A of the Act in respect of the following substantial question of law Whether on facts and in circumstances of the case and in law ITAT is justified in law in holding by following its decision in the case of Jamshri Ranjitsinghji Spinning Weaving Mills Ltd. 41 ITD 142 , that advance license benefit and DEPB benefits are taxable in the year in which these are actually utilized by the assessee and number in the year of receipts.
The facts pertaining to Civil Appeal No.
During the assessment proceedings, the assessee relied upon a decision of the Income Tax Appellate Tribunal in Jamshri Ranjitsinghji Spinning and Weaving Mills v. Inspecting Assistant Commissioner 1992 41 ITD 142 Mum and also the order of the Commissioner of Income Tax Appeals in its own case for the assessment years 1995 96 to 1997 98.
