2007 (5) TMI 227

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....sioner of Income-tax (Appeals) who quashed the assessment proceedings observing that there was no income escaping assessment being no remission or cessation of liability due to the pending litigation ?" 3. By the order dated April 10, 1995, the Tribunal has rejected the application under section 256(1) holding that the decision of the Tribunal dated October 28, 1994, is based on findings of fact and it does not give rise to any referable question of law. 4. The facts relevant for the decision are, that the assessment was originally completed on a loss of Rs. 3,26,761. In appeal the loss was enhanced to Rs.  3,32,921. Along with the original return, the assessee had filed a copy of the printed report and annual accounts for the year e....

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....sclosed, would not allow the Assessing Officer to make the necessary inquiries. 8. In the present case, the amount of Rs. 10,71,825.52 paise was disclosed as being the amount of refund received from the U. P. Excise Department, on account of the refund of export duty paid by the assessee on the export of rectified spirit outside Uttar Pradesh. 9. Then a further disclosure has been made by the assessee, regarding the reason why this refunded amount was being kept under contingent liabilities and not being appropriated towards income or trading receipts. The reason as disclosed in the said note No. 17 was that there may be claims against the aforesaid refund. 10. Thus, by the disclosure the Income-tax Officer was made aware of (i) the amou....

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.... Court declaring such duty as not payable was not in existence. Therefore, it cannot be said in retrospect now, that the assessee-company could not have collected the duty from the customers. According to the law as it stood at the time when the duty was collected from customers, it could legally be collected. 14. Further, "if the duty had collected it would form part of the assessee's trading receipts" is also a fallacious observation, because the customers could legally ask back for the duty wrongly collected from them. 15. Learned counsel for the Income-tax Department has further invited our attention to certain observations in the assessment order referring to a litigation between the assessee and one Ganga Nagar Sugar Mills Ltd. The....