9911796707
TMI Blog1984 (11) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... l erroneous and prejudicial to the interest of the Revenue. After hearing the ld. Counsel for the assessee, he set aside the assessment order directing the ITO to include the sum of Rs. 50,146 as the assessee's income for the year. It is this order of the CIT passed under s. 263 of the IT Act which is in challenge before us. 2. The ld. Counsel for the assessee has given a detailed list of the amounts coming up to a total of Rs. 40,146 forming the subject matter of the entry. This consists of 8 items. The total of the 8 items came to Rs. 52,606, out of which the amount written back in the past years and new paid to the constituents came to Rs. 2,458, leaving a balance of Rs. 50,146. The sum of Rs. 52,606 itself, according to the ld. counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds item No. 4, this represents unclaimed balances out of remittances in suspense for more than three years. These are received for advertisement purposes. Some of the parties might not have taken back small amounts outstanding after adjustment of the correct figure of advertisement dues. Likewise the sum of Rs. 367 under Item No. 5 represents unclaimed balances of circulation subscriptions also in suspense and kept for over three years. According to the ld. counsel, and the smallness of the amount would show in addition to the numerous persons involved that these are all small amount requiring adjustment. The 6th item represents unmatched credit balances in the books of the advertisement department. These are also outstanding for more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good businessman with concern for its business has to refund the amounts. Some of these amounts, according to the ld. counsel, could not be refunded because the assessee has not with it the address of the parties. It is also pointed out that during the year the assessee has repaid some amounts out of the amounts earlier written to the P & L A/c—which showed both the assessee's intentions and the existence of a potential claim. 5. The last two items are also, according to the ld. counsel, under the same category. The sum of Rs. 647 consists of several miscellaneous credits disputed, but immediately unidentifiable. In any party came to claim the same with the necessary papers, the assessee could not refuse payments. The 7th item represente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness. The benefit therefrom accrues to the assessee under s. 28(iv). According to the ld. counsel, the decision in Metal Rolling Works (P) Ltd. vs. (1982) CTR (Bom) 116 : (1983) 142 ITR 170 (Bom) supported the department's case. In fact this is the reverse of a claim for bad debts which the assessee could make if he were the creditor. Some expenditure which is not explained in the manner of an outgoing is involved. It is also pointed out that the amounts individually taken are small and no constituent would as a matter of fact, wait for claiming them or claim them either after a long time. Apart from whatever be the position in law, as a matter of fact, it cannot be ignored that this amount would constitute the assessee's real income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is not expenditure allowed in respect of these outstanding balances so as to attract the provisions of s. 41(1) in the case of a remission. The assessability has to be established as a matter of pure trade receipts and as income. This cannot be established in respect of any of these items. Thus neither as a taxable trade receipt nor as a result of remission of a liability can these amounts be brought to tax. The Bombay High Court in (1982) 31 CTR (Bom) 116 : (1983) 142 ITR 170 (Bom) relating to sales-tax collected and the balance after payment of the tax to the Government retained with the assessee would not apply to the present case. It is settled law that sales-tax collected is part of the trading receipt. In that case there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. They cannot, therefore, be treated as the assessee's income. Merely because part of the deposits remained unpaid to the depositor what was originally not an income receipt cannot be converted into income especially through a mere book entry on the part of the assessee. The creditors in the first place can always call for the return of the deposits. The assessee on the contrary can never regard it as its own business receipts. From either point of view this cannot constitute its income. The decision in Devies vs. Shell Co. of China Ltd. also helps the assessee. We direct that these amounts be deleted. 9. The last amount is a small one of Rs. 646 comprised of small items. looking to the nature of the amount and the extent, we do not thin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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