1988 (2) TMI 58

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....he Income-tax Appellate Tribunal is correct in law in holding that the amount of Rs. 1,07,469 receivable from M. Satyanarayanamurthy of Secunderabad on account of sale of free market sugar stock of 3,564 bags did not represent the assessee's income for the assessment year 1974-75 ?" We may mention, for the sake of completeness, that the Commissioner of Income-tax sought a reference of one more question but that was rejected by the Tribunal. As far as the question referred for the consideration of this court is concerned, we may notice a few facts. The assessee, the Palakol Cooperative Agricultural and Industrial Society, carries on business in the sale of sugar. During the course of its business transaction, the assessee entered into ....

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....ion, the sum of Rs. 1,07,469 ought to be treated as income of the assessment year 1974-75. Aggrieved by the aforesaid decision, the assessee appealed to the Commissioner of Income-tax (Appeals). The Commissioner took a contrary view and held that the amount is not liable to be treated as income. The Revenue filed an appeal against the order of the Commissioner (Appeals) before the Tribunal. After examining the relevant circumstances, the Tribunal came to the conclusion that the view of the Commissioner (Appeals) in the facts and circumstances was quite justified. Accordingly, the appeal filed by the Revenue was dismissed and the order of the Commissioner (Appeals) was upheld. It is in these circumstances that the Commissioner sought a....

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....the Tribunal was justified in coming to the conclusion that the income for the assessment year under consideration cannot include the sum of Rs. 1,07,469. We are inclined to agree with learned counsel for the assessee. Notwithstanding the somewhat cumbersome entries made in the books of account, the facts are clear. As far as the assessee in this case is concerned, there is no dispute that the sale price realised on the sale of 3,564 bags of sugar in public auction was only Rs. 11,14,092. The question of treating Rs. 12,21,561 as sale proceeds notionally and claiming the difference between the notional sale figure and the actual sale figure as sales return is unsupportable even as a matter of accounting principle. There is indeed no sale....