Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business income - Chargeable as - Assessment year 1985-86 - Assessee-firm, a dealer of HML had been collecting excise duty and did not bring amount so collected in relevant books of account - Under a Notification of Central Government, concession in levy of excise duty was granted for motor vehicles registered and solely used as taxi subject to production of a certificate to that effect from transport authority within prescribed time - Assessing Officer found that out of entire duty collected, assessee had remitted a part of amount at concessional rate to HML and retained balance with itself which was used for business purposes - Assessing Officer taxed differential excise duty though assessee had contended that differential excise duty was refundable to customers on producing said certificate - Whether amount of excise duty was collected by assessee as a part of its trading receipt to meet statutory liability of manufacturers and not as a deposit simpliciter - Held, yes - Whether, therefore, Tribunal was not correct in holding that differential excise duty collected by assessee could not be included as a part of assessee's income - Held, yes FACTS Under a notification issued by the Central Government, the concession in the levy of excise duty was granted to the motor vehicle registered and solely used as a taxi, on the manufacturer's furnishing a certificate from the State Transport Authority within three months from the date of clearance of the motor vehicle by the manufacturer after the payment of duty. The assessee-firm, a dealer of HML, had been collecting excise duty deposits from buyers of motor cars and did not bring that amount in the relevant books of account. The Assessing Officer found that in the year relevant to the assessment year 1985-86, the assessee had collected Rs. 12,62,438 as entire normal excise duty deposits and remitted Rs. 9,83,500 at concessional rate to HML and retained a sum of Rs. 2,78,938. He brought to tax Rs. 2,78,938 holding that amounts of duty collected were used for the purpose of day-to-day business by the assessee. On appeal, the Commissioner (Appeals) held that the amounts…

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