1977 (11) TMI 68

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....figures worked out by the ITO, there was thus an excess realisations of Rs. 19,455 on account of sales-tax. He, therefore, required the assessee to show cause why this amount should not be assessed as its income of this year. The assessee claimed that the entire amount realised by its as sales-tax was payable by it to the Government and relying on the decision in the case of Kedar Nath Jute Mfg. Co. 82 ITR 363 the assessee claimed that there was no justification for making any addition. The ITO held that the decision relied upon by the assessee was not applicable as according to him the assessee had kept Sales tax accounts of cash basis. He therefore, held that the case of the assessee would be covered by the decision in the case of Chowrin....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....and the remaining amount of Rs. 120 was paid on 31st March, 1976. The entire amount collected by the assessee had thus been paid to the Government. The U.P. Sales-tax account started with an opening credit balance of Rs. 453. The realisations during the year amounted to Rs. 4,807, making a total of Rs. 5,260. The payments during the year amounted to Rs. 4,128 leaving a balance of Rs. 1,132. This amount represented the tax for the last quarter ending on 31st March, 1973 and was paid to the Government on 30th April., 1973. Shri Garg, therefore, claimed that the entire amount collected by the assessee as sales tax during the year was payable by it to the Government and had actually been so paid. The assessee was maintaining books on mercantile....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on cash basis. This finding is based on the fact that the sales-tax collections had been credited in the sales-tax accounts as and when sales-tax was collected and the payments were debited as and when made. We do not see how this fact would be the basis for holding that the assessee was claiming sales-tax liability on cash basis. The finding of the ITO is contradicted by the fact that the amounts brought by the assessee as credit balance in the sales-tax amount this year were not assessed as assessee's income in the preceding year. There is absolutely no other evidence to show that the assessee was claiming sales-tax liability on cash basis. The facts pointed out by the assessee also show that the entire amount collected by it as sales tax....