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TMI Blog2012 (6) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... the said amount to the parties, it is open to the assessee to make such a claim for deduction of the amount so refunded. Prior period expenses - Held that:- It was not the case that the assessee received the bills after the end of the PY but the assessee omitted to claim the expenditure in the relevant AY which means the liability towards the expenses crystalised in the earlier previous years only. Hence it cannot be allowed in this year, as each AY is an independent and separate assessable unit - Decided in favor of Revenue - Tax Case (Appeal) No.890 of 2005 - - - Dated:- 25-4-2012 - Chitra Venkataraman And K Ravichandra Baabu, JJ. For Appellant: Dr. Anitha Sumanth For Respondent: Mr. T S Senthil Kumar Standing Counsel for Income Tax JUDGEMENT Per: Chitra Venkataraman: The assessee is on appeal against the against the order of the Income Tax Appellate Tribunal raising the following substantial questions of law relating to the assessment year 1991-92. 1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the sum of Rs.22,35,231/- being the refundable contingency deposit collected by the appellant is l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals) pointed out that the amount collected by the assessee was with respect to the sales effected by it and the same was not collected otherwise as a fixed deposit or caution deposit or earnest money deposit. In any event, irrespective of the nomenclature therein, the amount collected not being remitted to the State the same was to be assessed as a trading receipt. Aggrieved by the said order, the assessee went on appeal before the Tribunal, which confirmed the view of the Commissioner of Income Tax (Appeals). The Tribunal pointed out that the fact that the assessee had chosen to adopt the device of labelling a part of the amounts collected towards its sales tax liability as deposit would not make any difference. The said amount formed part of the assessee's income. The manner in which the assessee had treated the trading receipt in its account would not be a determining character and would not prevent the assessing authority from considering the same in the course of assessment. The Tribunal pointed out that the assessee had collected tax at 10% on the goods sold by it but remitted 4% to the Government keeping the balance with it. The amount so collected was part and parcel of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that what was collected was not sales tax but a caution deposit for the possible liability towards sales tax in the disputed cases pending before the High Court. In respect of such a claim, in the decision reported in 87 ITR 542 (Chowringhee Sales Bureau P. Ltd., V. Commissioner of Income Tax) , the Apex Court had occasion to consider a similar question. It was pointed out therein that the assessee had neither paid the amount collected as sales tax to the actual owner of the goods auctioned nor deposited the amount realised by it as sales tax to the State exchequer on the ground that the statutory provision creating the liability upon it was not valid. Taking note of the fact that the assessee had not refunded the said amount to the persons from whom it was collected, the Apex Court held that the said amount represented the trading receipt of the business of the assessee. Applying the said decision reported in 245 ITR 421 (K.C.P. Ltd., Vs. Commissioner of Income Tax) , the Supreme Court held that the mere retention of the excess amount collected in a separate account by the assessee, by itself, would not make any difference and it would not be conclusive of a question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had chosen to adopt the device of labelling a part of the amount collected towards its sales tax liability as deposit could not make a difference. Thus the said amount formed part of the assessee's income. Thus applying the said decision to the facts of the case herein, irrespective of the labelling, the deposit either as contingency deposit or security deposit, the fact remains that the assessee had collected sales tax towards disputed items and retained part of the amount with it. There are no materials forthcoming from the asseesee to show that the said contingency deposit was never dealt with by the assessee as part of the trading receipt. In the circumstances, we confirm the order of the Tribunal as regards the first substantial question of law. 10. It may be noted herein that the assessee had placed materials before this court that the sales tax collected subsequently were refunded to the parties. Even though the materials were placed, on perusal it is seen that those amounts relate to the assessment year 1995-96. In the circumstances, while treating the receipt as a trading receipt in respect of the assessment years under consideration before this Court, we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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