TaxTMI 
TaxTMI 
2007 (10) TMI 254
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.... court was delivered by K. Raviraja Pandian J.—The substantial question of law formulated for entertaining the appeal is as follows : "Whether, on the facts and in the circumstances of the case the Tribunal was right in treating the amount of Rs. 49,83,021 collected as contingent deposit as income of the appellant ?" 2. The facts of the case are as follows : The appellant is a non-banking co....
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....s. However, the Assessing Officer rejected the contentions of the appellant and brought to tax a sum of Rs. 49,83,021 after reducing Rs. 13,91,839 which was taxed earlier. 4. On appeal, the Commissioner of Income-tax (Appeals) allowed the appeal on the ground that the contingent deposit could not partake of the character of a trading receipt liability to be taxed in the relevant year. The Revenue....
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....nch has given the reason as follows (page 112) : "The true character of a receipt must be judged with reference to the reasons for the collection, and the liability for meeting which the collection was made. When the liability is a statutory liability, which the assessee was required to meet and for meeting which it was by the statutes or authorities permitted to collect the amount required from ....
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....t the tax had been levied at a higher rate than the rate permissible. The fact that the assessee had chosen to adopt the device of labelling a part of the amounts collected towards its sales tax liability as deposit could not make a difference. The amount formed part of the assessee's income." 8. The above decision has been rendered by the Division Bench of this court after taking stock of ....