9911796707
TMI Blog2006 (6) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... nded by them? (ii) Whether, on the facts and circumstances of the case, should not the Tribunal have held that the balance in the suspense account collected as deposited from the purchasers belongs to purchasers and not to the assessee especially when the amounts were systematically refunded to the parties as and when demanded in subsequent years? (iii) Whether, on the facts and circumstances of the case, was the Tribunal justified in holding that the assessee is entitled to deduction of the amounts as and when refunded to the parties after treating the balance amount in the suspension account as income of the year?" The assessee is a company owned by the Government of Kerala engaged in the manufacture, purchase and sale of rectified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion. The assessee raised a claim before the Assessing Officer that though the amount had been collected from the customers at the time of sale of arrack, collection was made on the clear understanding with the customers, that the excess amount would be refunded after the price revision by the Government. The Assessing Officer, however, has taken the view that as the amount had been realised as price for the sale of arrack, it was a trading receipt to be included in the total income of the previous year. Taking the view that the assessee would be entitled to claim deduction as and when refunds were made to the customers, the Assessing Officer added the amount in the total income. The assessee, aggrieved by the said order of the assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it was credited in the suspense account for return to the parties from whom it was collected. It is also contended that from the repayments made in the subsequent years the money really did not belong to the assessee. Counsel submitted the assessee is not entitled to treat the same as sale price and there is no question of claiming deduction as and when the amounts are returned to the parties from whom it was collected. Counsel placed reliance on the decision of the Bombay High Court in CIT v. Seksaria Biswan Sugar Factory P. Ltd. [1992] 195 ITR 778 and contended that the collection made by the assessee at the enhanced rate was an inchoate one and that extra amount did not accrue to the assessee until the finalisation of the dispute. Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel further submitted even though the amount was credited in the separate account the assessee was making use of the same for the purpose of business and utilising it as its own funds. In any view counsel submitted the receipt could be considered as expenditure for the relevant year and, hence, no prejudice would be caused to the assessee. The question to be considered is whether the excess amount collected by the assessee from the sale of arrack at a fixed rate per B.L is a trading receipt. We are of the view, what is important to be noticed is with regard to the character of receipts as sale proceeds of arrack and the mere fact that the assessee has kept separate account for the amount realised from the customers is of no consequence ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
