Allowing the appeal of the revenue the Court held that, the Tariff Authority for Major Ports had passed final orders on January 15, 2016 revising the container storage charges at the Chennai Port Trust for the period from July 6, 1994 to August 2001. The Authority had passed detailed and elaborate orders finally fixing the storage charges receivable. Consequently, the reason given by the assessee relating to pendency of the writ appeal or that the Tariff Authority for Major Ports had not finally determined the storage charges no longer survived. The obligation of the assessee to pay the amounts to the Chennai Port Trust arose immediately the Tariff Authority for Major Ports passed final orders fixing the storage charges on January 15, 2016 and since the assessee had not paid them, the amount in the assessee’s hands had to be treated as “income” taxable under section 41(1) . There had been no claim laid against that money. Consequently, the amount could be treated as the assessee’s income under section 41(1) , for the assessment years 2001-02 and 2003-04. (AY.2001-02 , 2003 -04)
CIT v. Chakiat Agencies Pvt. Ltd. (2019) 413 ITR 113 / 263 Taxman 126/ 179 DTR 265/ 311 CTR 886(Mad.)(HC)
S. 41(1) : Profits chargeable to tax-Remission or cessation of trading liability -Amounts collected by shipping agent for payment to port Trust Authority for the years 1994-99—Dispute was settled by passing final order fixing the storage charges fixing the charges on January 15, 2016–there was no claim against the amount collected -Amount collected was rightly treated as income of the assessee .