TaxTMI 
TaxTMI 
1982 (2) TMI 83
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....er under section 263 of the Commissioner, Gujarat-I, Ahmedabad, relating to the assessment year 1975-76. The Commissioner on examining the records noticed that the assessee had deducted the forfeited staff service deposit of Rs. 35,856, and credited the same to profit and loss account while arriving at the taxable income of the company and the ITO had allowed that deduction. The Commissioner consi....
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....ld remain continuously in employment with it and not leave the job after gaining experience in the organisation and for this purpose a security deposit was taken at the time of appointment for a period of 5 years. It was further stated that as per the provisions of the Companies Act, the deposit was required to be deposited in a separate bank account and could not be used for the purpose of the bu....
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.... the ITO was the subject-matter of appeal before the Commissioner (Appeals) who passed his appellate order on 23-1-1980 and, therefore, the ITO's order had already merged in the order of the Commissioner (Appeals). Same argument was advanced by the assessee before the Commissioner who rightly repelled it by pointing out that the point of deduction of forfeited staff service deposit had never been ....
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....ceived and that the amount of security deposit when received was obviously the liability of the company and no subsequent operation or alteration in accounts could turn it into a trading receipt. It is obvious that the security deposit when received was not a trading receipt. The subsequent forfeiture of the amount on the happening of the prescribed contingency in the facts and circumstances of th....