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TMI Blog2002 (12) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law referred to us in the negative, against the assessee and in favour of the Revenue. - - - - - Dated:- 18-12-2002 - Judge(s) : N. V. BALASUBRAMANIAN., K. RAVIRAJA PANDIAN. JUDGMENT The judgment of the court was delivered by N.V. BALASUBRAMANIAN J.-The assessee is a registered firm carrying on business as a dealer of Hindustan Motors Limited. The assessment year involved is 1985-86 for which the relevant previous year ended on August 16, 1984. The Assessing Officer while framing the assessment for the assessment year 1985-86 has found from the sale bills of the assessee that the assessee-firm has been collecting excise duty deposits from the buyers of motor cars and did not bring the amount collected by way of excise duty deposits in the relevant books of account. He found that the assessee had totally collected an amount of Rs. 12,62,438.08 as excise duty deposit during the relevant previous year and remitted a sum of Rs. 9,83,500 to the Hindustan Motors Limited and retained a sum of Rs. 2,78,938. He also found that excise duty deposits were collected at the time of booking of the motor cars by the purchaser and the amounts so collected were used for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded in the assessee's total income?" Learned counsel for the Revenue submitted that the amount collected by the assessee really represented excise duty payable by the customers. Under the dealer's agreement, the price payable by the assessee shall be as that established by the Hindustan Motors Limited which was inclusive of warehouse charges plus sales tax, if any, and any other taxes, duty or octroi payable to the Central Government or the State Government and, therefore, according to him, the assessee received the amount as part of the trading receipts. Learned counsel further submitted that the assessee has utilised the amount for the purpose of his business and hence the amount received by the assessee really represented his business income. Learned counsel for the Revenue relied on the decision of this court in CIT v. Southern Explosives Co. [2000] 242 ITR 107 and the decision of the Supreme Court in K.C.P. Ltd. v. CIT [2000] 245 ITR 421 and submitted that the receipts though called as deposits are really revenue receipts and, therefore, the Income-tax Officer was correct in treating the same as part of the trading receipts of the assessee. Mr. P.P.S. Janardhana Raja, le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1983, as amended by Notification No. 256 of 1983-CE" dated October 1, 1983. Under the said notification issued by the Central Government, the concession in the levy of excise duty was granted for the motor vehicle registered and solely used as a taxi, on the manufacturer furnishing to the Assistant Collector of Central Excise a certificate from the State Transport Authority within three months from the date of clearance of the motor vehicle by the manufacturer after payment of duty that the motor vehicle has been registered for use only as a taxi. The condition precedent for claiming concession in the levy of excise duty in the case of a sale of a motor car as a taxi is that the manufacturer should produce the necessary certificate from the State Transport Authority concerned that the motor vehicle was registered for use only as a taxi within three months from the date of clearance of the motor vehicle. If such certificate is not produced, the manufacturer is liable to pay the excise duty at the normal prescribed rate for the manufacture of the motor vehicle. In so far as the assessee is concerned, the assessee is a dealer of the motor vehicle and it is found on evidence that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise duty and in such a situation, the amount collected, it cannot be disputed, would form part of the price though the assessee would be entitled to the deduction of the amount on the transfer of money to Hindustan Motors. It is inconceivable that the character of receipt would change depending upon the contingency of the purchaser handing over the necessary documents and the assessee returning the money to the purchaser. Hence, we hold that the assessee had collected the amount as part of its trading receipts, as we earlier observed, the amount was collected for ultimately meeting the statutory liability. We are of the view that the ratio of the decision of this court in CIT v. Southern Explosives Co. [2000] 242 ITR 107 would apply to the facts of the case and the following principles laid down therein would govern the facts of this case as well: "The true character of the receipt must be judged with reference to the reasons for the collection and the liability for meeting which the collection was made. When the liability is a statutory liability, which the assessee was required to meet and for meeting which it was by the statutes or authorities permitted to collect the amount r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a deposit simpliciter and refundable after the bottles were returned. In that case, the intention of the assessee in collecting the amount was to treat the deposit not as part of the sale consideration of the bottles sold. However, on the facts of this case, the amounts were collected as part of the sale consideration of the vehicles and the assessee was obliged to return the money in the event of the production of necessary certificate by the purchaser. The submission that the assessee had furnished the names of the customers from whom the amounts were collected as deposit does not appeal to us as the question whether it is a trading receipt or not has to be judged at the time of the receipt of the amount. So also the label given or the nomenclature of the amount collected is not of any relevance. No doubt, the object of the assessee in collecting the differential excise duty was to safeguard itself in the event of the failure of the customer to produce necessary certificate and even assuming that the assessee entertained such a motive, when the assessee had collected the amount as part of excise duty it is liable to be treated as income of the assessee. It is no doubt true tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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