1969 (11) TMI 13

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....overnment imposed additional excise duty on yarn. The assessee apprehended that it might be required to pay additional excise duty on the yarn supplied to the Bombay party. On February 8, 1948, the assessee called upon the Bombay party to pay a sum of Rs. 74,361 towards additional levy that might be required to be paid to the Government. It was made clear in that letter that in case the amount was not paid to the Government, the amount would be refunded to the Bombay party. The Bombay party paid the assessee the sum of Rs. 74,361 in March, 1948. The assessee, however, persuaded the Government that no such additional excise duty was payable by the assessee on the yarn supplied to the Bombay party. The result was that the money remitted by th....

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....n the year in which it was credited in the capital reserve account. On the first issue the Tribunal's finding was that the amount received from the Bombay party did not constitute trading receipt of the assessee. On the second issue the Tribunal held that, even on the assumption that it was a trading receipt, it was not income for the assessment year 1951-52. Dr. Misra, appearing for the Commissioner, challenged the Tribunal's finding on the first issue. Dr. Misra urged before us that the receipt of Rs. 67,125 by the assessee in March, 1948, must be regarded as a trading receipt. Reference was made to the letter dated February 8, 1948, sent by the assessee to the Bombay party. A telegram sent by the assessee to the Bombay party, was quot....