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TMI Blog2002 (2) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... tten back was a unilateral act on the part of the assessee and therefore did not amount to the income. However, rejecting the contention of the assessee the Assessing Officer has treated the said sum as income and consequently the declared loss was reduced. Being aggrieved, the assessee went in appeal. 3. In first appeal ld.CIT(A) has relied upon the judgment of Bombay High Court in the case of CIT v. Chougule & Co. (P.) Ltd. (1991) 189 ITR 473and J.K. Chemicals Ltd. v. CIT (1966) 62 ITR 34, therefore, held that the ratio of these decisions directly apply on the case hence disallowance could not be sustained, accordingly directed to delete the same. Now the revenue is before us against the order of ld.CIT(A). 4. On behalf of the revenue ld. D.R. Shri P. Peerya appeared and strongly contended that ld.CIT(A) has relied upon certain old decisions of various High Courts, however, the position has now been clarified by the decision of Hon'ble Supreme Court in the case of CIT v. T.V. Sundaram Iyengar & Sons Ltd. (1996) 222 ITR 344. Ld. DR has submitted that this order of Hon'ble Supreme Court was passed by the bench of three Hon'ble Judges, therefore, has more strength and ought to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount as his income and if the assessee asserted that though he credited the amount to his profit and loss account, he was not entitled to do so or he was not entitled to forfeit, then the onus was upon him to establish that in law he was not entitled to treat the said amount as part of his income or that he was not entitled to forfeit the same and, therefore, his liability did not cease. Section 41 enacts certain adjustment provisions whereby the revenue takes back what it has already allowed if certain conditions come to pass and the assessee recoup something for which an allowance had already been made and deducted from his business income. It was found by the makers of Legislature that a number of assessees were escaping tax liability in regard to the credit of trading liabilities to P&L Account, even when the recovery of the debt have become barred by limitation or when there was no likely-hood of the liability being enforced against them. As per the provisions of section 41 where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and subsequently the assessee has obtained any am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee for a long period unclaimed by the trade parties. By lapse of time, the claim of the deposit became time-barred and the amount attained a totally different quality. It became a definite trade surplus. The assessee itself has treated the money as its own money and taken the amount to its profit and loss account. The amounts were assessable in the hands of the assessee. In this case an earlier decision of Jurisdictional High Court in favour of revenue namely Batliboi & Co. (P.) Ltd.'s case (supra) was also referred. Another decision of Jurisdictional High Court in the case of Bennett Coleman & Co. Ltd. (supra) was also heavily relied upon by the revenue. In clear terms the Hon'ble Court has observed that in extraordinary cases where the assessee wants to content that despite his own action of the nature indicated above the liability still survives, the onus will be on him to bring sufficient materials on record to satisfy the authorities concerned in that regard. It may not be out of place to mention here that the Hon'ble High Court has referred its own decision i.e. decided by Bombay High Court, in the case of CIT v. Chase Bright Steel Ltd. (No. 2) (1989) 177 ITR 128, J.K. Chem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to us in favour of the Revenue, and against the assessee." Therefore, on perusal of the above decision it is clear that at the time of passing the judgment of Sugauli Sugar Works (P.) Ltd.';s case (supra) the earlier decision of larger Bench of Supreme Court in the case of T.V. Sundaram Iyengar & Sons Ltd. (supra) was not mentioned. We have also noted that the decision of larger Bench of the Supreme Court has to be followed being binding in nature. As far as certain contentions raised by the assessee are concerned, we are not convinced with the same in view of the decisions as cited above as well as on account of following reasons. The first reason is that it is an admitted fact that the assessee on its own has written back the said amount and treated as its own money by crediting in the account. Since the assessee had already claimed necessary benefits in the past, therefore, in the year in which it was claimed as not outstanding balance, hence the nature of receipt was nothing but "re-venue receipt". The next reason for disagreement is that the onus was on the assessee to prove that the said liability had not ceased by producing such parties before th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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