TaxTMI 
TaxTMI 
1984 (11) TMI 93
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....e assessee for the year under appeal erroneous and prejudicial to the interest of the Revenue. After hearing the ld. Counsel for the assessee, he set aside the assessment order directing the ITO to include the sum of Rs. 50,146 as the assessee's income for the year. It is this order of the CIT passed under s. 263 of the IT Act which is in challenge before us. 2. The ld. Counsel for the assessee has given a detailed list of the amounts coming up to a total of Rs. 40,146 forming the subject matter of the entry. This consists of 8 items. The total of the 8 items came to Rs. 52,606, out of which the amount written back in the past years and new paid to the constituents came to Rs. 2,458, leaving a balance of Rs. 50,146. The sum of Rs. 52,606....
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....ing Pres (P) Ltd. (1980) 125 ITR 326 (Bom) 1975 CTR (Bom) 14 : (1976) 102 ITR 428 (Bom. As regards item No. 4, this represents unclaimed balances out of remittances in suspense for more than three years. These are received for advertisement purposes. Some of the parties might not have taken back small amounts outstanding after adjustment of the correct figure of advertisement dues. Likewise the sum of Rs. 367 under Item No. 5 represents unclaimed balances of circulation subscriptions also in suspense and kept for over three years. According to the ld. counsel, and the smallness of the amount would show in addition to the numerous persons involved that these are all small amount requiring adjustment. The 6th item represents unmatched credit ....
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....oach the assessee requesting for payment, the assessee in fairness and equity and above all as a good businessman with concern for its business has to refund the amounts. Some of these amounts, according to the ld. counsel, could not be refunded because the assessee has not with it the address of the parties. It is also pointed out that during the year the assessee has repaid some amounts out of the amounts earlier written to the P & L A/c—which showed both the assessee's intentions and the existence of a potential claim. 5. The last two items are also, according to the ld. counsel, under the same category. The sum of Rs. 647 consists of several miscellaneous credits disputed, but immediately unidentifiable. In any party came to claim ....
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....e. 6. For the Department it is pointed out that these monies were received in the course of the business. The benefit therefrom accrues to the assessee under s. 28(iv). According to the ld. counsel, the decision in Metal Rolling Works (P) Ltd. vs. (1982) CTR (Bom) 116 : (1983) 142 ITR 170 (Bom) supported the department's case. In fact this is the reverse of a claim for bad debts which the assessee could make if he were the creditor. Some expenditure which is not explained in the manner of an outgoing is involved. It is also pointed out that the amounts individually taken are small and no constituent would as a matter of fact, wait for claiming them or claim them either after a long time. Apart from whatever be the position in law, as a m....
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....ctually there cannot be said to be any remission by the creditor of these amounts. It is to be noted that there is not expenditure allowed in respect of these outstanding balances so as to attract the provisions of s. 41(1) in the case of a remission. The assessability has to be established as a matter of pure trade receipts and as income. This cannot be established in respect of any of these items. Thus neither as a taxable trade receipt nor as a result of remission of a liability can these amounts be brought to tax. The Bombay High Court in (1982) 31 CTR (Bom) 116 : (1983) 142 ITR 170 (Bom) relating to sales-tax collected and the balance after payment of the tax to the Government retained with the assessee would not apply to the present c....