TaxTMI 
TaxTMI 
TaxTMI 
2001 (11) TMI 212
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....cipal viz. Orient General Industries Ltd. supplies goods to the assessee and the letter is expected to sell the same at fixed price. The assessee is entitled to commission on the sales effected by them. The assessee is also entitled to collect sales-tax, octroi, etc. from the customers. During the year under appeal, the assessee sold goods to the tune of Rs. 4,49,13,535 out of which a sum of Rs. 3,79,22,595 was credited to the principal leaving a surplus of Rs. 69,90,940 with the assessee. The assessee had not given the details of the deduction of Rs. 69,90,940. On enquiry, the Assessing Officer found the details of the deductions made by the assessee from the account of the principal as under:-- Rs. Sales Return &nb....
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....bsp; 69,90,940 The assessee could not satisfactorily explain the transfer of Rs. 3,40,000 to the current outstanding account. The AO was of the view that the income to the tune of Rs. 3,40,000 had escaped assessment. He, accordingly, issued a notice under section 148. During the course of assessment proceedings, reference was made to the Dy. Commissioner of Income-tax, Range-2, Ahmedabad under section 144A. Shri M.L. Roongta, partner of the firm appeared before the DCIT along with authorised representative. The assessee filed a letter dated 28-3-1990 before the DCIT in which the sum of Rs. 3,40,000 was surrendered as a trading receipt. The AO was, accordingly, directed to make the addition of Rs. 3,40,000 as surrendered....
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.... addition on account of outstanding sales-tax in ITA Nos. 1345 and 1346/Ahd./1992 for assessment years 1984-85 and 1985-86. The Revenue is in appeal against the decision of the CIT(A). 4. It was contended that the CIT(A) has wrongly deleted the addition as the amount of Rs. 3,40,000 was neither paid to the principal nor refunded to the customers. The assessee and its authorised representative had appeared before the DCIT and surrendered the amount for taxation. In this connection, our attention was drawn to the finding of the AO at page 6 of the assessment order. It was further contended that the decision of the Tribunal related to the liability of the assessee on account of sales-tax and the same did not extend to the excess collection ma....
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....ecover from the dealers amount such as sales-tax, octroi, etc. In the year under appeal, the assessee had collected a sum of Rs. 4,49,13,535 from the dealers. A sum of Rs. 3,79,22,595 was credited to the principal. A sum of Rs. 69,90,940 was the excess recovered from the dealers over the amount paid to the principal. I have reproduced the details of Rs. 69,90,640 elsewhere in this order. The amount of Rs. 3,40,000 has been recovered by the assessee from the dealers the nature of which the assessee was not able to explain before the revenue authorities. It is nobody's case that the amount of Rs. 3,40,000 was recovered from the dealers on behalf of the principal. A statement has been made by the assessee to claim that the amount represented e....
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.... the Hon'ble Supreme Court in the case of D. Shankaraiah is also inapplicable to the facts of this case. Their Lordships of the Hon'ble Supreme Court in the case of Sun Engineering (P.) Ltd. held that the decision of the court is rendered in the context of the facts of that case and the same should not be applied to any other case de hors the context. In the case of D. Shankaraiah. Their Lordships of the Hon'ble Supreme Court distinguished its own decision in the case of Chowringhee Sales Bureau (P.) Ltd. CIT [1973] 87 ITR 542 in the following words:-- "In the present case, the ruling will not apply as the assessee is only a commission agent when it collected sales tax. The assessee was doing so only as a commission agent of the principal....
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.... the Andhra Pradesh General Sales Tax Act, 1957 in the grounds of appeal. Their Lordships further observed that the appellant would not be allowed to raise such ground which required further investigation of law and facts. In the light of the above finding, it is evident that the decision of the Hon'ble Supreme Court in the case of D. Shankaraiah is under the peculiar circumstances and would not be applicable in such cases where under the provisions of the State Sales Tax Act, the definition of "dealer" includes "commission agent". In the case of commission agent, if it were established by the assessee that the amount of Rs. 3,40,000 has been collected by them on behalf of the principal, then the receipt in the hands of the assessee would n....