Judgment :- Radhakrishnan, J. This appeal is preferred by the Commissioner of Income-tax, Cochin under section 260A of the Income-tax Act against the order of the Income-tax Appellate Tribunal, Cochin Bench in ITA No.935/Coch/91 dated 16-10-2000. The following questions of law are raised for consideration. 1. Whether, on the facts and in the circumstances of the case, the amount of Rs.55,28,862/- being the refund of counter-vailing duty received by the assessee during the year of account relevant to the assessment year 1987-88 could be brought to tax in the assessment year 1987-88 under the provisions of section 41(1) of the Income-tax Act? 2. Whether, on the facts and in the circumstances of the case and also in the light of the decision of the Supreme Court in 224 ITR 764, can the amount of Rs.55,28,862/- be brought to tax in the assessment year 1987-88 under the provisions of section 41(2) of the Income-tax Act? 3. Whether, on the facts and in the circumstances of the case can the amount of Rs.55,28,862/- be brought to tax as a business receipt in the assessment year 1987-88? Assessee company had originally filed a return of income claiming a net loss of Rs.2,04,81,264/- for the assessment year 1987-88. During the previous year relevant for assessment year 1987-88 assessee had received Rs.55,28,862/- being refund of counter-vailing duty pursuant to the Collector of Exercise allowing assessee’s appeal. Assessing officer therefore brought it to tax the said amount under section 41(1) on the ground that the refund had accrued to the assessee and the assessee has actually received the amount. Aggrieved by the said order assessee took up the matter in appeal before the Commissioner of Income-tax (Appeals). Commissioner (Appeals) however, placing reliance on the decision of this court in K.V. Moosa Koya & Co. v. I.T.O. and another, 175 ITR 120 and the decision of the apex court in Hindustan Housing and Land Devp. Trust Ltd. v. Commissioner of Income-tax (Appeals) 161 ITR 524 held that the actual cessation of remission of liability under section 41(1) took place in assessee’s case only when the appeal by the Excise department was withdrawn as per Supreme Court’s order dated 26-7-1998 and therefore, counter-vailing duty refund cannot be included as income of the year. Revenue aggrieved by the said order took up the matter in appeal before the Tribunal. Revenue aggrieved by the said order took up the matter in appeal before the Tribunal. Tribunal dismissed the appeal concurring with the view of the Commissioner (Appeals), against which this appeal has been preferred. 2. The assessee had during the year 1986-87 received from the Central Excise Department a refund of Rs.55,28,862/- as countervailing duty. Assessee’s contention was that there was dispute about the assessee’s eligibility to refund of countervailing duty and until that dispute is finally resolved, the amount would not become due to the assessee and cannot be taken as having accrued to the assessee. We are not prepared to accept the contention of the assessee that the refund had not actually accrued to the assessee. In our view the decision of the apex court in 161 ITR 524 would not apply to the facts of this case. Apex court held that he right to enhanced compensation is an inchoate right and additional compensation does not accrue when amount awarded is disputed by Government by filing appeal. That was a case where the amount was deposited before the court. Court permitted to withdraw the amount furnishing a security bond. The court held that there was no absolute right to receive the amount at that stage. A Division bench of this court in 175 ITR 120 (supra) following the above mentioned decision of the Supreme Court held that the refund cannot be included in assessment for assessment year 1974-75 but only in assessment year 1975-76. 3. We are of the view the principle laid down in the above mentioned decisions as such would not apply to the facts of this case in view of the decision of the apex court in Polyflex (India) Pvt. Ltd. V. CIT, (2002) 257 ITR 343. A bench of the Supreme Court specifically considered the scope of section 41(1) of the Income-tax Act, 1961 and held that where a statutory levy is discharged by the assessee and subsequently the amount paid is refunded, it will be a case where the assessee “has obtained any amount in respect of such expenditure” within the meaning of section 41(1) of the Income-tax Act, 1961; it will not be a case of benefit by way of remission or cessation” of a trading liability. The court held that where expenditure is actually incurred by reason of payment of duty on goods and the deduction or allowance is given in the assessment of an earlier period, the assessee is liable to disgorge that benefit as and when he obtains refund of the amount so paid. Whether there is a possibility of the refund being set at naught on a future date, is not a relevant consideration. Once the assessee gets back the mount which was claimed and allowed as business expenditure during an earlier year, the deeming provision in section 41(1) comes into play and it is not necessary that the revenue should await the verdict of a higher court or tribunal. If the higher court or tribunal upholds the levy at a later date the assessee is not without a remedy to get back the relief. 4. We are of the view the above mentioned judgment is squarely applicable to the facts of this case. If that be so, the finding of the Commissioner as well as the Tribunal cannot be sustained. Section 41(1) seeks to tax the following as income in respect of loss, expenditure or trading liability allowed/deducted in previous year: (a) An amount obtained in cash or in any other manner in respect of such loss or expenditure, or (b) Some benefit in respect of such trading liability by way of remission/cessation thereof. 5. Section 41(1) seeks to tax any amount obtained in cash or in any other manner in respect of such loss or expenditure or to tax some benefit in respect of such trading liability by way of remission/cessation thereof. Refund was received by the assessee as per the order of Collector of Central Excise and so as there is a cessation of liability, which had been allowed earlier in the computation of income, the refund of the amount is taxable as a revenue receipt under the provisions of Section 41(1) of the Income-tax Act. Facts would show that the assessee had actually received the refund and had accounted the same. Merely because the revenue had filed an appeal before the apex court, which was later withdrawn, did not mean that the refund had not actually accrued to the assessee. In fact, it accrued to the assessee and had actually received it, and hence the amount is assessable under section 41(1) of the I.T. Act. 6. Merely because the revenue had filed an appeal before the apex court, which was later withdrawn, did not mean that the refund had not actually accrued to the assessee. In fact, it accrued to the assessee and had actually received it, and hence the amount is assessable under section 41(1) of the I.T. Act. 6. The Tribunal in our view had erred in not treating the refund as cash obtained of an expenditure allowed in prior years. The Tribunal’s finding that the refund relates to an amount paid by the assessee out of profit for the year 1980 or so cannot be sustained. 7. We therefore answer the question in favour of the revenue and against the assessee. Appeal is therefore and the order of the Commissioner (Appeals) and that of the Tribunal are set aside and the order of the assessing authority would stand restored.