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TMI Blog2004 (10) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue contention that the "empty bottles return security deposits" received from the agents and retailers are trade receipts, is liable to be rejected and the said amount is not taxable in the hands of the assessee. The Tribunal was, therefore, right in holding that the security deposits received from the agents and the retailers are not taxable in the hands of the assessee. - - - - - Dated:- 6-10-2004 - Judge(s) : P. D. DINAKARAN., S. R. SINGHARAVELU. JUDGMENT The judgment of the court was delivered by P.D. Dinakaran J.- The appellant is the Revenue. This appeal is with reference to the assessment year 1990-91. According to the appellant/Revenue, the respondent/assessee filed a return for the assessment year 1990-91 and the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation at the rate of 100%? (ii) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the security deposits received from the agents and the retailers are not taxable in the hands of the assessee?" Question (i). Whether, on the facts and circumstances of the case, the Tribunal was right in holding that crates and bottles are entitled for depreciation at the rate of 100%? Even though the appellant/Revenue treated the bottles in question as a whole and considered the same as a unit and calculated the value above Rs. 5,000 and contended that the respondent/assessee is not entitled for 100% depreciation, the law is now well settled as per the decision of this court in First Leasing Co. of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the bottles and shells, the soft drink could not be effectively transported. The bottles and their contents were totally interdependent. So were the shells. The bottles and shells also satisfied the durability test because it was nobody's case that their life was so transitory or negligible as to warrant an inference that they had no function to play in the assessee's trade. They were, therefore, "plant" for the purposes of the Act and the assessee is entitled to depreciation in respect of them under section 32(1)(ii) of the Act. The said decision of the Andhra Pradesh High Court in CIT v. Sri Krishna Bottlers Pvt. Ltd. [1989] 175 ITR 154, was confirmed by the apex court by a decision reported in [1994] 209 ITR (St.) 85. The view tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee and the money remained that of the consumers since, on the return of the cylinders, their security deposit was refundable and hence, the security deposit was not a revenue receipt, and the said view of the Tribunal was upheld by the Division Bench of the Delhi High Court. Mr. J. Narayanasamy, learned standing counsel for the appellant/Revenue inviting our attention to the decision of the apex court in CIT v. Punjab Distilling Industries Ltd. [1964] 53 ITR 75 contends that the amounts deposited by the agents and retailers are to be treated as trading receipts constituting income of the assessee, which is taxable. A deep consideration is, therefore, required to deal as to the applicability of the ratio laid down by the apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bottles to the distiller so that its trade in selling the produce of its distillery might not be hampered for want of bottles. It is also interesting to observe that the Government had not fixed any time limit within which the bottles had to be returned in order to entitle the wholesaler to the refund, nor had a refund ever been refused. The said "buy-back scheme" of the Government to ensure the return of bottles is intended to relieve the scarcity of bottles. The distiller was assessed to income-tax on the balance of amounts, viz., the additional sums left after the refunds were made. Then the question arose whether the balance of amounts of these additional sums left after the refunds were made is assessable. The apex court in Punj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the Punjab High Court, viz., whether the collections by the assessee-company described in its accounts as "empty bottles return security deposits" were income assessable under section 10 of the Income-tax Act. The Punjab High Court took the view that as a result of the amendment to the Punjab Excise Rules made under the Punjab Excise Act, which came into effect from April 1, 1948, the charges collected after that date were not covered by that judgment, and held that the amended rule made the ratio decidendi of the earlier judgment in the same assessee's case reported in Punjab Distilling Industries Ltd. v. CIT [1959] 35 ITR 519 (SC), inapplicable to the charges collected after that date. The apex court, on appeal preferred by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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