TaxTMI 
TaxTMI 
1990 (5) TMI 75
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.... one of which we may term as "The Sales-tax Suspense Account" and other "The Sales-tax Payable Account". True copies of these accounts as furnished to us by the revenue at the hearing are Annexures "A" and "B" to this order. The division bench made reference to the figures in these two accounts and after referring to these figures, the bench stated that the Income-tax Officer had brought to tax one item of Rs. 13,5 8,390 and another item of Rs. 3,50,644. Having regard to the arguments advanced before them and with reference to judicial pronouncements as well as earlier decision in the assessee's own case by the Tribunal, the bench, after making a mention that the main issue for decision is whether the assessee was entitled to claim the deduction of Rs. 3,50,644, concluded in the Reference under sec. 255(3) requesting the President to constitute a special bench, as under :--- "In our opinion the orders passed by the Tribunal allowing both types of claim has inherent contradictions. We would, therefore, suggest that these contradictions have to be resolved by a Special Bench. The issue is to be referred to the Special Bench would be as follows :--- "Whether on the facts and in ....
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....The balance sheet shows a liability of Rs. 30,33,588 (closing balance) as "Deposit" from dealers kept in Suspense Account. For the reasons discussed in detail in the asst. orders for the A.Ys 1980-81 and 1981-82, an amount of Rs. 13,58,390 (i.e., Rs. 30,33,588 reflected in the balance sheet minus Opening balance already added in the asst. year 1982-83 viz., Rs. 16,75,198) is added back as excess collections includible in the income." 8. We now come to the Sales-tax Payable Account which forms annexure "B" to this order. There were two entries, one of sales-tax paid for the last month of the earlier previous year, i.e., September 1981, which was on 24th October, which read: "To Sales tax paid for Sept. 81 4,28,503.29", and the other on 30-9-1982 relating to payments of the year which read: "To Transfer from sales-tax payment A/c 42,36,751". The aggregate of these two amounts which related to payments came to Rs. 46,65,254. 9. In the Sales-tax Payable Account, there was an entry on 30-9-1982, viz., "By S.T. payable on sales for the year ended 30-9-1982 50,15,897.72". The Income-tax Officer deducted from the amount of Rs. 50,15,897 the amount of 46,65,254 which gave the figure o....
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.....) Ltd. v. CIT [1974] 97 ITR 615, and the decision of the Calcutta High Court in CIT v. Bird & Co. (P.) Ltd. [1981] 128 ITR 600. The learned Departmental Representative emphasized that a liability which was not admitted by the assessee could not be allowed as a deduction. 12. In reply, the learned counsel for the assessee submitted that when by virtue of statutory provisions the liability to pay sales-tax had accrued, the question whether the assessee showed liability to pay sales-tax in the returns filed by it before the sales-tax authorities or not was not material. According to him, the judicial pronouncements on this issue, particularly the decision of the Supreme Court in the case of Kedarnath Jute Mfg. Co. (P.) Ltd. v. CIT [1971] 82 ITR 363, are quite clear and the deduction of Rs. 3,50,644 was correctly allowed by the Commissioner (Appeals). 13. On the second issue regarding allowance of Rs. 13,58,390, the submission of the learned Departmental Representative is that the assessee itself had made a computation of the sales-tax payable at Rs. 50,15,897. There was no question of the assessee making a further claim for deduction of Rs. 13,58,390. The amount of Rs. 13,58,39....
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....e disallowed and any amount which may be in excess of the liability could, of course, be disallowed. 17. The assessee has made a computation of the sales-tax payable on the sales for the year ended 30-9-1982 and such quantification is specifically recorded in the accounts maintained by the assessee at Rs. 50,15,897. There is no material in the assessment order to show that this was an incorrect computation, nor is there any material placed before us which would further the stand of the revenue. Therefore, there is no warrant for making a disallowance of Rs. 3,50,644 which represented the difference between Rs. 50,15,897 which was the provision for sales-tax payable made by the assessee in the accounts and the payment of Rs. 46,65,254. We, therefore, confirm the deduction allowed by the Commissioner (Appeals) of Rs. 3,50,644. 18. Coming to the amount of Rs. 13,58,390, we have perused carefully the reference under sec. 255(3) as made by the division bench. As stated by us earlier, the division bench had categorically stated that the present appeal was a fit and proper appeal to be heard by a Special Bench. This appears in the Preamble and it is clear that what is being referred....
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....ht, the learned counsel submitted that time should be given at least for a day to enable the assessee to work out and reconcile the figures. 20. We have given anxious thought to this request of the assessee's counsel. In our opinion, the assessee had worked out the sales-tax payable on sales for the year ended 30-9-1982 and had clearly depicted the amount so payable at Rs. 50,15,897 as seen from the copies of accounts at Annexures "A" and "B", and in arriving at this figure, the assessee had even made a computation of the sales-tax difference that could be charged taking the total turnover to include the sales-tax element also. The accounts as placed before us do not contain any material to show that any computation had been made by the assessee in the books which would constitute evidence that the actual sales-tax liability on the sales of the year would have been Rs. 63,74,287. The claim which is sought to be made by the learned counsel, if anything, is with reference to additional demands raised subsequent to the close of the previous year by the Sales-tax Department which figures of demand also require to be verified and reconciled with reference to the sales in the previous....
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....se, the travelling expenses claimed are only Rs. 32,783 which is Rs. 12,000 lower than that claimed in the assessment year 1981-82. It cannot be said that ex facie the claim is excessive looking to the amounts actually allowed in the earlier years. We, therefore, see no reason to differ from the conclusion arrived at by the Commissioner (Appeals) in deleting the disallowance of Rs. 16,392. The appeal of the revenue on this ground fails. 23. In the result, the appeal is allowed in part. Annexure-A M/s. Central Wines: Hyderabad Statement of Sales-tax Collection in Suspense A/c for 1981-82 Date Particulars Debit Credit 1981 By Balance c/f 16,75,198.68 Oct. 31 By Sales-tax collection for 79-80 on bill No. 609 & 610 by debit note Nos. 459 & 460 1,69,950.70 Oct. 31 By S.T. collection in Oct. 81 vide debit note Nos. 679 to 688 3,12,839.00 Nov. 30 By S.T. collection in the Nov. 81 vide debit note Nos. 460 to 477 5,41,604.00 Dec. 31 By S.T.collection in Dec.81 vide debit note Nos. 478 to 487 3,15,594.00 1982 Jan. 31 By S.T. collection in the month of Jan. 82 vide D. note Nos. 488 to 499 2,73,944.00 Feb. 12 By S.T. collection in Feb. 82 vide debit no....