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23. Ld CIT D.R.submitted that the bank provides bank guarantee to its customers to cover their liability and against this, charges its commission one time, which may or may not be refundable on revocation of guarantee before its maturity date. He pointed out that it is a question of fact which needs to be ascertained. He submitted that the decision in the case of American Express International Banking Corporation(supra),relied upon by ld CIT (A) is not applicable to the facts of the case because in the said decision, it was the expenditure which was claimed for spread over whereas in the case of the assessee, it is the income which has been received at the time of giving bank guarantee. Further in the case of debentures, the discount though accrued was payable in future spread over of debentures which is not the case of the assessee. Similarly, the decision in the case of Bank of Tokyo Ltd (supra), is not applicable because in the said case, the guarantee commission was refundable in case the bank guarantee was revoked before the time of full time period of guarantee. But in the present case, the AO has observed that the guarantee commission is not in the nature of advance commission. Thus, the decision in the case of Bank of Tokyo Ltd (supra) is not applicable. He submitted that the spread over of the guarantee commission can be allowed only if the commission was refundable on premature revocation of guarantee. He submitted that fact whether the commission was refundable or not has not been examined and, therefore, the matter may be restored to the file of the AO.

"It is clear therefore that income may accrue to an assessee without the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody."

In the light of above decision, the issue needs to be examined. Ld CIT (DR) has pointed out that the deciding factor would be whether the guarantee commission is refundable or not. If the guarantee commission was refundable then it cannot be said that absolute right to the commission had accrued in favour of the assessee at the time of execution of contract for furnishing guarantee by it but if the guarantee commission was not depended upon the period of guarantee and, thus, had accrued in favour of the assessee on the date of execution of contract for furnishing guaratnee then the same has to be taxed in the year in which the guarantee was furnished irrespective of the period to which guarantee remained alive. This is so because the guarantee commission cannot be apportioned with reference to the period over which the guarantee extended. Even in the case of Bank of Tokyo Ltd (supra) heavily relied upon by ld Counsel for the assessee, this principle has been accepted, which is evident from the observations noted in para 22 above. We, therefore, restore this matter back to the file of the AO to examine the issue in the light of above discussion and if he finds that as per the term, the commission was refundable on the revocation of guarantee, then the guarantee Bank of Bahrain & Kuwait BSE commission is to be spread over the period for which the guarantee is given else it is to be taxed in the year the guarantee had actually been given irrespective of the period for which it spread. This ground is allowed for statistical purposes.