Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business income - Chargeable as - Government of India, by its Levy Sugar Supply (Control) Order, 1972, fixed rate at which sugar should be sold by sugar mills in the country - A number of sugar mills, including that of assessee, objected to validity of said Order and filed writ petition before Supreme Court - Supreme Court admitted writ petitions and passed a conditional order that assessee might collect price of sugar at rate existing prior to introduction of said Control Order, but difference in price collected should be deposited in a separate account or a bank guarantee of an equal amount should be furnished with Supreme Court's Registrar - Pursuant to it, assessee collected certain sum which represented difference between price which was existing prior to introduction of said Control Order and price as fixed under said Control Order - Eventually Supreme Court dismissed said writ petition upholding validity of Control Order - Whether in view of fact that the Levy Sugar Price Equalisation Fund Act, 1976, clearly imposed an obligation on assessee to repay said excess collection to constituents from whom it was collected, same could be treated as trading receipt in assessee's hands - Held, on facts, no Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Whether even otherwise on facts mentioned under head 'Business income - Chargeable as' said excess amount collected by assessee which, after dismissal of writ petition, was to be repayed to constituents, could be claimed as business expenditure - Held, yes Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Year in which deductible - Whether in view of facts mentioned under head 'Capital or revenue receipt', coupled with facts that assessee was following mercantile system of accounting and said transactions related to relevant accounting year, same was to be allowed as deduction, irrespective of fact as to whether money was repaid wholly or otherwise before close of relevant accounting year by it - Held, on facts, yes FACTS The Government introduced an Order called the 'Levy Sugar Supply (Control) Order, 1972' whereby…

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