9911796707
TMI Blog1985 (8) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... tc. have been filed by the assessee. The assessment was completed under s. 144 on an income of Rs. 6,36,700 on 23rd March 1981. The assessee filed a petition under s. 146. This was allowed. The assessment was again made on 19th Feb 1983. During the relevant accounting year, apart from the usual contract receipts, an amount of Rs. 6,08,758 has been received by the assessee in terms of an arbitration award dt. 17th Nov., 1977. According to the assessee, an amount of Rs. 1,53,996 was included in the relevant assessment year's contract receipts and the balance amount of Rs. 4,54,762 had been split up for the preceding asst. yr. 1974-75 to 1977-78 and included in the receipts of those years on the ground that they related to those years. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional grounds; 1. The addition of Rs. 4,54,76 is contrary to law. This amount has been already assessed in earlier assessment will amount to double taxation of the same amount in the hands of the same person which type of assessment is prohibited by law. 2. The amount of Rs. 6,08,758 received by the assessee under the award is a capital receipt. So, Rs. 4,54,762 added in this year and Rs. 1,53,996 which is wrongly returned as income of this year is not assessable to tax. He filed a paper book of 27 pages, His arguments were to the following effect, In the earlier assessment years, the assessee filed revised returns claiming loss. But the assessment were completed at nil income. He pointed out that Rs. 4,54,762 was already assessed. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ballantine (8 TC 595.). If this is accepted the amount of Rs. 1,53,996 included by the assessee as the receipt in the assessment year under appeal should also be excluded. 5. The arguments of the ld. departmental representative were to the following effect: Inspite of repeated opportunities given to the assessee, the assessee has not produced books of account said to have been maintained by him in support of the profit and loss account filed for the asst. yrs. 1975-76 to 1977-78. So it cannot be said that the amount of Rs. 4,54,762 was taxed earlier and that there would be double taxation. The amount of Rs. 4,54,762 as per the decision of the Supreme Court in the case of CIT vs. A. Gajapathy Naidu (1964) 53 ITR 114 (SC). The amount of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee was keeping his accounts on mercantile system., In such circumstances, the whole amount of Rs. 6,08,758 is to be brought to tax in the asst. yr. 1978-79 only as it was received during the relevant previous year. As the assessee had already included Rs. 1,53,996 in the receipts shown in the profit and loss account, the ITO is perfectly justified in making the addition of the balance of Rs. 4,54,762. Further even if the assessee is presumed to have kept his accounts on mercantile system, the amount of Rs. 6,08,758 is to be taxed in this assessment year only as per the decision of the Supreme Court in the case of A. Gajapathy Naidu. In the case of CIT vs. Kalicharam Jagannath (1961) 41 ITR 40 (All) during the accounting year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of the accounting year 1945-46 and that the income did not accrue or arise to the assessee in that accounting year. This was approved by the Supreme Court in the case of CIT vs. A. Gajapathy Naidu (1964) 53 ITR 114 (SC) In the case of Gajapathy Naidu the assessee was maintaining accounts on mercantile basis. Even then in similar circumstances, the Supreme Court held that the additional amount could not be related back to the earlier years during which the assessee actually supplied articles to the hospital. 7. But here in the assessee's case, it is not proved by the assessee that he was following mercantile system of accounting by maintaining proper books of account. Even assuming that he has proved that he was following mercantile s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing figures were exhibited: 1. Opening stock of materials and work in progress . Rs. 4,900 2. Opening stock of finished poles . Rs. 27,700 3. Material purchased . Rs. 91,786 Less: Transfer to construction of yard Rs. 22,990 Rs. 68,886 4. Depreciation . Rs. 43,737 5. Closing stock of poles . Rs. 61,550 6. Sales . Rs. 1,08,188 According to the assessee's letter dt. 6th Dec., 1977 placed in the ITO's records for the asst. yr. 1977-78, which was filed in the Income-tax Office on 7th Dec., 1977, the assessee had filed revised returns for the asst. yr. 1974-75 to 1977-78 stating as under: "Due to the award ..... X X X X Extracts X X X X X X X X Extracts X X X X
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