TaxTMI 
TaxTMI 
1980 (12) TMI 72
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.... 1971-72 at Rs.125.10 and Rs. 124.55 per quintal. The assessee had however, challenged the order of the Government before the Karnataka High Court in writ petition No. 1634 of 1972 alleging that the price that it was getting was unremunerative. By order dt. 24th July, 1972 the Hon'ble High Court stayed the operation of notification issued by the Central Govt. in this behalf and permitted the assessee to sell 60 Per cent of the sugar produced by it at Rs. 150 per quintal during the pendency of the writ petition by subject to the condition that the assessee main tainted accounts and refunded the amount received in excess of the price fixed in the event of the dismissal of the petition. The assessee, therefore, credited the sum of Rs. 43,10,11....
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....essee was free to make use of the funds as it thought fit. Moreover on 30th June, 1972, the interim order of the Karnataka High Court was the authority and, therefore, the assessee ought to have included the said amount as its income from the relevant assessment year. So far as the levy Sugar Price Equalisation Fund Act was concerned, the Commr. was of the view that the assessee had already challenged the validity of the Act in the Supreme Court. He, therefore, rejected all the assessee's contentions and directed the ITO to make a fresh assessment. He also directed that the ITO should give an opportunity to the assesses to have a say in the matter, where it could contend that the amount taxable was only Rs. 32,97,962 since the excise duty h....
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....the sales at Rs. 161 per quintal and furnish copies of the said account in the first week of every month in respect of the previous month to the second respondent. In the event of the above writ petition being dismissed, the petitioner shall refund a sum calculated at Rs. 161 per quintal to the dealers to whom they have sold sugar in pursuance of this order." Consequently, the assessee company in that case kept the difference of amount between the selling rate of Rs. 145 fixed by the Government and 161 permitted by the High Court to the tune of Rs. 3,15,280 in the suspense account and the ITO excluded the same from the taxable income of the assessee. The Addl. CIT Mysore, at Bangalore similarly passed an order under s. 263 of the IT Act ....
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....ly, he referred to CIT vs. A. Gajapathy Naidu (1964) 53 ITR 114 which generally lays down the principles as to the year to which particular income can be said to arise to an assessee Similarly reference was made by him to CIT vs. Ashokbhai Chimanbhai (1965) 56 ITR 42 for determining the particular year of the accrual of income. Then he referred to the cases relating to realisation of sales-tax by the assessees. The first was Chowringhee Sales Bureau Pvt. Ltd. vs. CIT (1973) 87 ITR 542 wherein it was held that the amount realised by the assessee on account of sales-tax formed part of trading receipt and the fact that the assessee had not shown it as such would not prevent it from being treated like that. Similarly, Sinclair Murray and co. Pv....
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....ey had strictly no relevance to the issue in question. What we find is that these two authorities relate to sales-tax collections. 5. This apart, while there may be some force in the Department's contention that the extra amount was actually received by the assessee from its customers during the accounting year in question, the fact remains that the same was saddled with a liability both in terms of the High Court order and the ultimate notification of the Central Govt. In Pope the King Match Factory vs. CIT (1963) 50 ITR 495 there was a demand of Rs. 21,373 and odd and though the assessee objected to the demand and was seeking to get the order of the Collector of Excise reversed, it debited the amount in his accounts on the last day and....