TaxTMI 
TaxTMI 
1989 (1) TMI 173
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.... facts of the case, as was stated by the learned Sr. Deptl. Rep., was that the main business of the assessee was exporting of man power out ofIndiain the name and style of M/s Selective Powers as a proprietor. One Saudi Arabian firm, M/s CEDARCO, Jeeddha appointed the assessee as its agent for recruiting personnel for various works or jobs inSaudi Arabia. The assessee himself worked for M/s CEDARCO in the year 1975 and rose to the rank of Personnel Director within a period of three years. While he was in service he used to carry on the business of recruitment of labour personnel on behalf of the foreign company. As years passed by he was able to develop his own contacts and on that basis he left his job with the Saudi Arabian concern and started the present business. 2.1 The business involved recruitment of various labourers, arrange for their pass ports, visas, medical clearance, air line tickets and other emigration formalities. Various persons, who were desirous of going abroad, used to deposit monies with the assessee for all the above, as well as towards the service charges. In course of the search conducted the Revenue Department had seized certain materials, which include....
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....see was not in a position to bring in any material, which could go to establish that the amount was in the nature of security deposit only, which was why the amount was added as unexplained by the assessing officer. 3. As against these facts the CIT(A) had deleted the addition on the plea that the statements of Shri Mohammed Illias and Shri Nazar Ahmed had no validity in the eyes of law for the reason that they were recorded at the back of the assessee. The only other reason that emerges out of the CIT(A)'s order was that the assessee having shown Rs. 70,500 as having been refunded, it could not be said that the amount is not in the nature of security deposit and that is not intended to be refunded. The plea of the learned Sr. Deptl. Rep., Mrs. Kacker was that it is, thus, clear that CIT(A) had failed to examine the issue on merits and various evidences on the basis of which the assessing officer had made the addition. Reliance was placed on Nihori Lal Prabhu Dayal vs. CIT (1951) 19 ITR 240 (All), CIT vs. Rameshwar Prasad Bagla (1968) 68 ITR 653 (All), Newton Chikli Collieries Ltd. vs. CIT (1962) 44 ITR 495 (SC) and Workmen of Associated Rubber Industries Ltd. vs. Associated Rub....
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....are several authorities on the subject that the nature of receipt of item does not change by passage of time and it shall remain the same as at the time when the receipt occurred. Since in the instant case the nature of receipt was that of a security deposit, it can never partake the character of Revenue. Reliance was placed on 22 ITD 9, Addl. CIT vs. Netar Krishna Sahgals Pvt. Ltd. (1983) 34 CTR (Del) 376 : (1983) 143 ITR 681 (Del); CIT vs. MP State Agro Industries Development Corporation (1983) 139 ITR 312 (MP); Bijli Cotton Mills (P) Ltd. vs. CIT (1971) 81 ITR 400 (All) and Parimisetti Seetharamamma vs. CIT (1965) 57 ITR 532 (SC). 5. Referring to pages 1 to 4 of his paper book, he submitted that in the cases of persons, who could not get their jobs, the amounts that were received had been refunded by means of cheques to them, which also goes to establish that the intention of the assessee was to refund the amount in case their jobs, for which they had approached the assessee, could not be done. This also goes to establish that the nature of the receipt, as was shown by the assessee, was in the nature of security deposit. 6. On this issue we have given our very careful cons....
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....t later on discontinued it due to shortage of manpower in their office. In this regard, we had observed earlier while referring to Exhibit A-18, that the receipts, which contained particulars of the persons, have been correlated with the persons with whom the agreements have been entered into and that these persons are listed in the registers and full particulars have been found to have been entered. Thus, doubting the veracity of these registers would be improper on facts. The agreement that was normally entered into with the person, gives the nature of job, which the particular person has sought out of India, the amount that he has deposited with the assessee for meeting of air ticket, medical expenses, service charges etc., the amount that was retained as deposit, which would be refundable on completion of the contract period with his employer and that the deposit shall not bear any interest. Each such format had been signed by the respective persons, whose passport number and full particulars are available in the registers. The security deposit in some cases is as high as 800 rupees. The service charges that had been charged from each of the labourers was a fixed sum of Rs. 300....