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Sec. 5 & 80HHC of the Income-Tax Act, 1961 - Income – Revenue challenged the order of Tribunal on various questions including in holding that cash compensatory assistance and duty drawback is liable to tax on receipt basis and not on the accrual basis contrary to the view expressed by it in the case of the assessee for the A.Y. 1994-95. High Court dismissed the appeal of the revenue holding that “Tribunal has permitted deduction on accrual basis and has held that an amount would be receivable only when the income accrues to the assessee and income would accrue to the assessee only when the assessee gets such a right to receive the income. It was also held that since, the amount of cash compensatory assistance and duty drawback during the relevant year was not sanctioned to the assessee therefore, the income has not accrued to the assessee. Thus, in fact the tribunal has allowed the deduction on accrual basis only”. - CIT V/s ASEA BROWN BOVERI LTD. -  272 TAXMAN 224 (KARN)