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TMI Blog1980 (12) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... ged the order of the Government before the Karnataka High Court in writ petition No. 1634 of 1972 alleging that the price that it was getting was unremunerative. By order dt. 24th July, 1972 the Hon'ble High Court stayed the operation of notification issued by the Central Govt. in this behalf and permitted the assessee to sell 60 Per cent of the sugar produced by it at Rs. 150 per quintal during the pendency of the writ petition by subject to the condition that the assessee main tainted accounts and refunded the amount received in excess of the price fixed in the event of the dismissal of the petition. The assessee, therefore, credited the sum of Rs. 43,10,110 received in this behalf under the head "current liabilities" and the claim was ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 972, the interim order of the Karnataka High Court was the authority and, therefore, the assessee ought to have included the said amount as its income from the relevant assessment year. So far as the levy Sugar Price Equalisation Fund Act was concerned, the Commr. was of the view that the assessee had already challenged the validity of the Act in the Supreme Court. He, therefore, rejected all the assessee's contentions and directed the ITO to make a fresh assessment. He also directed that the ITO should give an opportunity to the assesses to have a say in the matter, where it could contend that the amount taxable was only Rs. 32,97,962 since the excise duty had been paid out of the excess realisation. The ITO was also directed to consider a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t week of every month in respect of the previous month to the second respondent. In the event of the above writ petition being dismissed, the petitioner shall refund a sum calculated at Rs. 161 per quintal to the dealers to whom they have sold sugar in pursuance of this order." Consequently, the assessee company in that case kept the difference of amount between the selling rate of Rs. 145 fixed by the Government and 161 permitted by the High Court to the tune of Rs. 3,15,280 in the suspense account and the ITO excluded the same from the taxable income of the assessee. The Addl. CIT Mysore, at Bangalore similarly passed an order under s. 263 of the IT Act and directed the ITO to revise the assessment and include the said amount in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s down the principles as to the year to which particular income can be said to arise to an assessee Similarly reference was made by him to CIT vs. Ashokbhai Chimanbhai (1965) 56 ITR 42 for determining the particular year of the accrual of income. Then he referred to the cases relating to realisation of sales-tax by the assessees. The first was Chowringhee Sales Bureau Pvt. Ltd. vs. CIT (1973) 87 ITR 542 wherein it was held that the amount realised by the assessee on account of sales-tax formed part of trading receipt and the fact that the assessee had not shown it as such would not prevent it from being treated like that. Similarly, Sinclair Murray and co. Pvt. Ltd. vs. CIT (1974) 97 ITR 615 was cited for the proposition that the amount col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo authorities relate to sales-tax collections. 5. This apart, while there may be some force in the Department's contention that the extra amount was actually received by the assessee from its customers during the accounting year in question, the fact remains that the same was saddled with a liability both in terms of the High Court order and the ultimate notification of the Central Govt. In Pope the King Match Factory vs. CIT (1963) 50 ITR 495 there was a demand of Rs. 21,373 and odd and though the assessee objected to the demand and was seeking to get the order of the Collector of Excise reversed, it debited the amount in his accounts on the last day and claimed it as deductible allowance in computing his income. It was held by the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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