1980 (11) TMI 10

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..... amount transferred to the deposit account by the assessee on the sale of tractors, did not represent its taxable income during the A.Ys. 1972-73 and 1973-74, respectively ? " The material facts giving rise to this reference, as set out in the statement of the case, briefly are as follows: The assessee is a government company established for the development of agro-industries and for carrying on allied activities. The assessee derived income in the assessment years 1972-73 and 1973-74 by way of commission on sales of tractors purchased by it from M/s. Hindusthan Machine Tools Ltd. The assessee had placed an order with M/s. Hindusthan Machine Tools Ltd. for the purchase of 100 tractors during the assessment year 1973-74. M/s. Hindusthan .....

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..... excess price charged by the assessee was to be refunded as the assessee was entitled to a fixed commission of Rs. 500 per tractor only. The AAC, therefore, held that the excess price realised by the assessee could not be held to be the income of the assessee. He, therefore, deleted the additions , of Rs. 3,00,604 and Rs. 64,757 made by the ITO towards the total income of the assessee during the assessment years 1972-73 and 1973-74. Aggrieved by the order passed by the AAC, the Department filed appeals before the Tribunal. The Tribunal found that the amounts transferred by the assessee to the deposit account were never its income and that the said amounts were only kept in deposit for being paid either to the supplier or to the farmers. In .....

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..... d., who had supplied tractors to the assessee, had provisionally charged the price awaiting the final decision of the government. Hence, the amounts in question received by the assessee cannot be held to be trading receipts of the assessee. Learned counsel for the Department referred to our decision in Addl. CIT v; Chandrakant D. Patel (MCC No. 311 of 1976 decided on 6-11-1979-since reported in [1983] 139 ITR 233). But that decision is distinguishable on facts., In that case, the question for consideration was whether a refund of sales tax constituted income of the assessee. In the instant Case, the Tribunal, in our opinion, was right in law in holding that the sums of Rs. 3,00,604 and Rs. 64,757, received by the assessee in the assessment .....

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