Reimbursement of excise duty not taxable as income where no independent receipt or trading income arose.

An amount received merely as reimbursement of central excise duty paid on behalf of another party, and not as an independent receipt or trading income, was held not to constitute taxable income. On the facts found by the appellate authority and affirmed by the Tribunal, the assessee had not received any separate income from the buyer Government Department, so the addition for excise duty receivable was unsupported. The deletion of the addition was upheld and the Revenue's question of law was answered against it.

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Issues: Whether the Tribunal was justified in deleting the addition made on account of excise duty receivable and in holding that no taxable income arose from the amount treated as reimbursement.

Analysis: The amount credited by the assessee was treated as a reimbursement of central excise duty earlier paid on behalf of the Government Department and was not shown as a debit in the profit and loss account. On the facts found by the appellate authority and affirmed by the Tribunal, the assessee did not receive any independent income from the buyer Government Department, and the addition was therefore unsupported.

Conclusion: The deletion of the addition was upheld and the question of law was answered against the Revenue and in favour of the assessee.

Final Conclusion: The appeal failed and the assessment addition relating to excise duty receivable was not sustained.

Ratio Decidendi: An amount received merely as reimbursement of duty paid on behalf of another party, and not as independent receipt or trading income, cannot be brought to tax as income.

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