1991 (4) TMI 55

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....olding that the sum of Rs. 8,64,323 which was the difference between the proceeds of sale of 11,884 bags of sugar sold by the assessee-company at the rate of Rs. 209.60 a quintal, which was the selling price fixed by the Allahabad High Court, and the proceeds of sale at the rate of Rs. 136.87 a quintal fixed by the Central Government, which amount was actually realised by it, did not constitute its income and hence was not liable to be included in its total income ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal ought to have held that the Appellate Assistant Commissioner should have enhanced the assessee's total income by an amount of Rs. 2,59,296, on the ground that though the difference referred to in the ....

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....represent the assessee's income, the Incometax Officer made an addition of Rs.6,05,027 (Rs. 8,64,323 minus Rs. 2,59,296) to the assessee's income. The Appellate Assistant Commissioner accepted the assessee's claim that the assessee's interest in the extra sale proceeds was only contingent and the said amount, therefore, did not constitute the assessee's income. This he did by placing reliance on our High Court decision in the case of CIT v. Nadiad Electric Supply Co. Ltd. [1971] 80 ITR 650. The dispute was carried to the Tribunal by the Department. Placing reliance on the Supreme Court decision in the case of Chowringhee Sales Bureau P. Ltd. v. CIT [1973] 87 ITR 542, it was argued that the reliance by the Appellate Assistant Commissioner on....

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.... ITR 113, Shri Trivedi reiterated that the extra amount received by the assessee was subject to several conditions. The amount was made available to the assessee on a bank guarantee and was to be refunded if the assessee lost in the writ petition. It was stated that both the Andhra Pradesh and the Karnataka High Courts, in identical circumstances, took the view that the amounts so received did not accrue to the assessee as its income until the finalisation of the dispute. Shri Trivedi also invited our attention to the fact that, by its order dated December 17, 1990 (CIT v. Nawabganj Sugar Mills Ltd., the Supreme Court dismissed a special leave petition by the Department against a similar order dated August 18, 1983, of the Delhi High Court ....