TaxTMI 
TaxTMI 
2008 (11) TMI 69
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....sment years relate to 1992-93 and 1993-94 respectively. 2. The assessee is a company engaged in offset printing. For the assessment years 1992-93 and 1993-94, the assessee filed its return. The assessee had collected an amount of Rs.3,38,586/- (Assessment Year 1992-93) and Rs.4,42,448/- (Assessment Year 1993-94) as contingency deposits for payment of possible tax liability. The assessee's case is that the contingency deposit collected during the year is not a trading receipt, but only a deposit. In the assessment order, the Assistant Commissioner rejected the assessee's contention holding that whether it is shown as contingency deposit account or suspense account, it made no difference and the collections formed part of....
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.... petitions were filed. The challenge to the constitutionality of the Act was accepted and the act was amended. If the tax becomes payable, then it would be paid out of the contingency deposit, if not, the amount would be refunded. This was the understanding on which it was collected. There was no unjust enrichment. In fact, in the subsequent years, it was refunded. The learned counsel also submitted that in the proceedings under the Tamil Nadu General Sales Tax Act also it was accepted that what was collected by the assessee was in the nature of contingency deposit. The assessee has also produced proof to show that in the subsequent years, the amounts received were refunded. Learned counsel relied on the following decisions: (i) Ta....
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.... case, the question was whether there is transfer of property in the ink in execution of job work of printing, whether it is taxable and whether tax had to be paid on the ink so used. Since here the question whether the contingency deposit is to be treated as income for the relevant year or as trading receipt is to be decided, we are not dealing with those decisions cited by the learned counsel for the assessee which turn on the questions whether the amounts received as contingency deposit would be "collections by way of tax" under the relevant State Sales Tax Acts. 6. In C.I.T. v. Hindustan Housing and Land Development Trust [1986] 161 ITR 524 (SC), the assessee's lands were acquired. The Land Acquisition Officer awarded com....
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....ealt with. Almost all the decisions that are on the point have been considered in the above case and that is why in Sundaram Finance Ltd. v. Dy. C.I.T./Jt. CIT [2008] 303 ITR 364 (Mad), it has been held that this is not longer a debatable issue. 7. In Dalmia Cement (Bharat) Ltd. v. Dy. CTO [1989] 73 STC 167, it was held thus (headnote): "There was no question of the deposits being paid over forthwith to the Government. The money had been collected by way of deposit to meet a contingency where the transactions between the petitioners and the buyers were held to be liable to tax. The petitioners were answerable for the deposits only to the customers." 8. Therefore, neither withdrawal of enhanced compensation which is kept in a ....
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....ourt referred to by the learned counsel are orders of stay of assessment order. In the case on hand, it is stay of the penalty. The retention of the amounts by the assessee was not by virtue of orders of court. 9. Since the facts are not in dispute, it is enough if we deal with the question of law alone. The amounts collected by the assessee were amounts which were meant to be utilised for meeting its tax liability. The fact that at that time, the relevant provision was under challenge does not make a difference insofar as the assessee is concerned, since the assessee had collected the amounts only to meet the tax liability. In CIT v. Southern Explosives Co. [2000] 242 ITR 107 (Mad), this Court had held that the devise adopte....
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....e event of the goods being treated as chemicals." 10. In CIT v. South India Sugars Ltd. [2001] 248 ITR 92 (Mad) also, the same question was raised and this Court, relying on CIT v. Southern Explosives Co. [2000] 242 ITR 107 (Mad), had observed as follows : "... the amounts collected by the assessee were amounts which were meant to be utilised by the assessee for meeting its tax liability. Even if the assessee had paid over the entire amount received by it as deposit towards sales tax to the State Government, it would still have been open to the assessee to seek refund if the assessee wished to claim such refund on the ground that the tax had been levied at a higher rate than the rate permissible. The fact that the assessee had chosen ....