2009 (11) TMI 987 - HC - Income Tax

Summary

Issues involved: Appeal challenging concurrent findings of Commissioner of Income-Tax (Appeals) and Income-Tax Appellate Tribunal regarding treatment of sum received for supply of liquor as income.

Summary:

1. Assessment Year 1998-99:
The appeal was filed by the Revenue against the findings of the Commissioner of Income-Tax (Appeals) and the Income-Tax Appellate Tribunal regarding the treatment of a sum received for the supply of liquor as income for the assessment year 1998-99.

2. Assessee's Position:
The assessee had received a sum of &8377;75,61,415/- from M/s Blue Mountain Food Products Ltd. for the supply of liquor. The Assessing Officer treated this amount as a benefit accrued to the assessee and made it liable to tax, as M/s Blue Mountain Food Products Ltd. had written off the said amount in its accounts.

3. Appeal and Findings:
The assessee challenged the Assessing Officer's order before the Commissioner of Income-Tax (Appeals), who concluded that the assessee was not aware of the write-off by M/s Blue Mountain Food Products Ltd. The Tribunal also affirmed this decision. The appeal raised questions regarding the treatment of the sum received and whether it could be considered as income u/s the Income Tax Act.

4. Judgment:
The High Court held that if the assessee had knowledge of the write-off by M/s Blue Mountain Food Products Ltd., the Assessing Officer could have treated the amount as income. However, since the assessee was not aware of this, the return filed by the assessee could not be faulted. The Court dismissed the appeal, upholding the decisions of the Tribunal and the Commissioner of Income-Tax (Appeals).