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Supreme Court of India

CIT v. Excel Industries Ltd

[2013] 358 ITR 295 (SC)(2014) 13 SCC 459
Date of order: 8 October 2013
Appellant: Commissioner of Income Tax
Respondent: Excel Industries Ltd
In favour of: Assessee
Legislation referred / considered
Accrual of income / method of accounting (old Sections 4 & 5)
Headnote — editorial summary
Catchwords: Real income vs hypothetical income; accrual; right to receive; consistency
Income tax is charged on real income, not hypothetical income — income "accrues" only when there is a real, enforceable right to receive it, not on a notional or contingent basis.
Judgment

What it decided

The benefit under advance import licences was not taxable until actually realised — no income accrues on a merely hypothetical or contingent entitlement. The Court also endorsed consistency: revenue should not disturb a settled position without good reason.

Why it matters

A frequently-cited authority on the accrual/real-income principle — used to resist tax on notional, unrealised or contingent gains.

Current status

Good law and widely applied; the real-income doctrine continues under the Income-tax Act, 2025.

Status
✔ Good law — followed, not overruled
Verified against later citations. citator soon
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