2006 (2) TMI 104

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..... is a settled law that as long as the receipt of the amount by the assessee was clearly associated with a liability to refund the amount, such receipt of amount would not be characterized as an income and, therefore, the same cannot be taxed - In the instant case, the Supreme Court has more clearly held that the sum proposed to be taxed does not belong to the assessee at all and the same was directed to be refunded to the customers and any left over excess has to be paid to the charitable trust – therefore, we do not see any merit to entertain the appeals
Judge(s) : P. D. DINAKARAN., P. P. S. JANARTHANA RAJA. JUDGMENT The judgment of the court was delivered by P.D. Dinakaran J.-The above tax case appeals are directed against the orde .....

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..... taxable only at 8 per cent., with a direction to refund the excess amount to the customers to the extent it is possible and to donate the left over excess, which could not be refunded, to the charitable trust for utilisation for public charitable purposes. However, the Assessing Officer, reassessed under section 147 of the Act and taxed the amount collected by the assessee towards sales tax, as referred to above, in the respective assessment years. Aggrieved by the same, the assessee preferred appeals before the Commissioner of Income-tax (Appeals), who allowed the appeals, discussing in detail that the assessee did not commit any omission to disclose necessary facts at the original assessment stage itself nor did the Assessing Officer co .....

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..... e has preferred the above appeals raising the substantial questions of law referred to above. It is also a settled law that as long as the receipt of the amount by the assessee was clearly associated with a liability to refund the amount, such receipt of amount would not be characterized as an income and, therefore, the same cannot be taxed vide K.C.P. Ltd. v. CIT [2000] 245 ITR 421 (SC). In the instant case, the Supreme Court has more clearly held that the sum proposed to be taxed does not belong to the assessee at all and the same was directed to be refunded to the customers and any left over excess has to be paid to the charitable trust, viz., Arya Vaidya Educational Foundation. Therefore, we do not see any merit to entertain the above .....

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