Law:

Section:

Section 28(i) of the Income-tax Act, 1961 [Corresponding to section 10(1) of the Indian Income-tax Act, 1922] - Business income - Chargeable as - Assessment year 1951-52 - Assessee-company was manufacturing yarn - In March 1948 buyer remitted money to assessee towards levy of additional excise duty - Assessee, however, pursuaded Government that no additional excise duty was payable by assessee on yarn supplied to buyer and as a result additional excise duty was never paid to Government by assessee - A small amount was remitted to buyer and balance remained with assessee till end of calendar year 1950 - In 1950 assessee credited balance amount to its capital reserve account - There were no further receipts during calendar year 1950 - Whether even on assumption that there was trading receipt during year 1948, there was no income of assessee in relevant assessment year - Held, yes - Whether, therefore, amount credit to capital reserve account could not be treated as income of assessee for relevant assessment year - Held, yes FACTS The assessee company manufacturing yarn apprehended that it might be required to pay additional exercise duty on the yarn supplied to the buyer. The buyer paid to assessee the amount in March 1948. It was made clear between the parties that in case the amount was not paid to the Government, the amount would be refunded to the buyer. The assessee persuaded the Government that no additional excise duty was payable by the assessee on the yarn supplied to the buyer and as a result the additional levy was never paid to the Government. A small amount was refunded by the assessee to the buyer and the balance remained with the assessee till the calendar year 1950. In the calendar year 1950, the assessee had credited the balance amount to the capital reserve account. The ITO treated the said amount as the assessee's income for the relevant assessment year. On appeal, the AAC confirmed the order of the ITO. On second appeal, the Tribunal set aside the order of the AAC. On reference: HELD The consent of the purchaser for the adjustment would not make much difference as regards the question whether there was any income of the assessee in the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492