2003 (1) TMI 16

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.... deemed as profit under section 41(1) of the Income-tax Act for the assessment year 1987-88?" The matter arises under the Income-tax Act, 1961 (for short "the Act"). The brief facts necessary for the decision of this case are as follows: The respondent-assessee is a partnership firm carrying on business in the export of marine products. During the course of the assessment for the year 1987-88 the relevant accounting period ended on December 31,1986, the Assessing Officer noted that in the balance-sheet of the firm as on December 31, 1986, there was a provision of Rs. 27,01,111 towards purchase tax liability. The Assessing Officer also found that out of the total provision of Rs. 27,01,111, Rs.17,89,732 had already been taxed in the earli....

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....86] 63 STC 239, there is a cessation of the purchase tax liability during the previous year relevant to the assessment year in question and, consequently, the said amount was rightly treated as deemed income of the assessee in the assessment for the year 1987-88. Senior counsel further submitted that the Tribunal has wrongly cast the burden on the Revenue to establish that there is cessation of liability during the previous year relevant to the assessment year in question. Senior counsel alternatively submitted that at any rate, when the Tribunal felt that there is no material on record to show that there is cessation of the purchase tax liability during the previous year relevant to the assessment year in question, the Tribunal should have....

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....y granting exemption claimed under section 5(3) of the Central Sales Tax Act the position would be clear that there is cessation of purchase tax liability at least in the assessment stage. The assessee has taken the stand that the assessment for the relevant assessment year is pending before the Assessing Officer. The Tribunal, in the absence of any contra material, has acted on that basis and held that the Department has not established that there is cessation of purchase tax liability during the previous year relevant to the assessment year warranting invocation of section 41(1) of the Act. As already noted, the decision of the Supreme Court in Sterling Foods' case [1986] 63 STC 239 deals only on the question regarding the identity of ....