TaxTMI 
TaxTMI 
2000 (8) TMI 3
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....g the order of the Commissioner of Income-tax deleting Rs. 14,96,130 being the excess realisation over and above the authorised price on sale of sugar ?" The aggrieved assessee has come up in appeal. The appellant-company manufactures sugar and other items. It follows the mercantile system of accounting. In the assessment year 1972-73, the levy price of sugar was fixed at Rs. 120.30 per quintal. The appellant challenged the order appointing ceiling on the price of the sugar by filing a writ petition in the High Court. On March 31, 1970, the High Court of Andhra Pradesh passed an interim order which, inter alia, read as under : ". . . the operation of notification issued by the respondent herein namely the Union of India, Ministry of Food....
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....s pertinent to note that neither the interim order of the High Court had specifically cast a liability on the appellant-company to refund the amount to the purchasers of the sugar from whom the excess amount was realised in the event of the petition being dismissed nor did the final order of the High Court direct the appellant to refund the amount. All that the interim order meant was that upon the dismissal of the writ petition, the appellant could no longer charge the price of Rs. 131 plus excise duty, The fact remains, as was admitted at the Bar that the amount continued to remain with the appellant-company and was not refunded to the purchasers. Then came into force, with effect from April 1, 1976, the Levy Sugar Price Equalisation Fun....
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....of the sugar sold by it during the course of its trading activities and, therefore, it has been rightly held by the High Court to be a trading receipt of the appellant-company. We will refer to the law laid down in a few cases by this court. In Chowringhee Sales Bureau P. Ltd. v. CIT [1973] 87 ITR 542 (SC), the appellant as an auctioneer effected sales of furniture and realised from the buyers in addition to the commission Rs. 32,986 as sales tax. The appellant neither paid this amount to the actual owner of the goods on whose behalf the goods were auctioned nor deposited the same in the State Exchequer upon the plea that the statutory provision creating that liability upon it was not valid. The amount was also not refunded to the persons ....
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....ity deposit was also returned as and when the bottles were returned. This additional sum was entered by the assessee under the heading "Empty bottles return deposit account". A question arose whether the assessee could be assessed to tax on the balance of the amounts of these additional sums left with the assessee after the refunds were made. This court held that in realising the additional amount described as security deposit, the assessee was really charging an extra price for the bottles. The additional amounts taken were an integral part of the commercial transaction of the sale of liquor and bottles and when they were realised they were the moneys of the assessee and remained thereafter the moneys of the assessee. They were the assesse....
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....ht of the appellant-company to realise the amount was the subject of dispute. The interim order of the High Court, looking to the phraseology employed therein, would not make any difference in the nature of receipts by the assessee. Though learned senior counsel for the appellant submitted that the excess amount was retained in a separate account, that would also not make any difference in our opinion. Firstly, the consistent view of this court, as noticed hereinabove, is that merely maintaining a separate account under a heading given by the assessee would not alter the nature of the receipt if it actually be a trading receipt. Secondly, nothing is available on record to find out how and in what manner the separate account was maintained b....
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....hich was that the assessee shall refund the amount received in excess of the price fixed in the event of the pending dispute being decided adversely to the assessee by the court. Thus the receipt of the amount by the assessee was clearly associated with a liability to refund the amount, which liability was ascertainable and quantified. Such is not the case at hand. The High Court of Karnataka and Bombay have in their decisions referred to and applied the decision of this court in CIT v. Hindustan Housing and Land Development Trust Ltd. [1986] 161 ITR 524. The facts of the case before the Supreme Court were that certain lands belonging to the assessee-company were first requisitioned and then compulsorily acquired by the State Government. On....