Law:

Section:

Section 145 of the income-tax act, 1961-method of accounting-charge on receipt/accrual basis-whether claim for refund of excise duty preferred by assessee after expiry of prescribed time-limit would accrue only on date on which claim was allowed after condonation of delay and not on any earlier date-held, on facts, yes-for its export of sugar during earlier years, assessee-company initially received certain amount as 'on-account payment' and in later assessment year it received additional amount towards balance of sale price on final settlement-whether such additional amount was taxable in year of receipt and was not to be set off against export loss of earlier years-held, on facts, yes Facts The assessee-company became entitled to refund of excise duty, pursuant to a notification issued by the Government on 4-5-1961. It claimed the refund in December 1961, when the stipulated period of three months in rule 11 of the Central Excise Rules, 1944 within which the refund should have been claimed had expired in respect of a portion of the refund. On 7-6-1962, the assessee's claim for refund was accepted by the Collector, subject to relaxation of time limit by the Central Board of Revenue. The delay in preferring the claim was condoned by the Central Board of Revenue and the refund was authorised on 29-9-1962. The ITO held that the refund accrued on 29-9-1962. The AAC and the Tribunal, however, held that the right to get refund should be taken to have accrued on 7-6-1962 (which fell in the preceding assessment year). On sugar exported by the assessee-company in earlier years, it had originally received payment at a certain rate, as an 'on-account payment'. In a later assessment year, it received additional sum after sale price was finally fixed. The ITO taxed the additional sum as the assessee's income in the year of receipt, though the assessee contended that the same should be set off against export loss claimed in the preceding assessment year. The AAC and the Tribunal, however, accepted the assessee's claim. On reference : Held Rule 11 of the Central Excise Rules is in a mandatory form and does not permit refund of duties or charges erroneously paid unless…

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