TMI Blog2006 (7) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... collected by the assessee and remaining unpaid towards sales tax be disallowed under section 43B of the Income-tax Act ? 2. Whether, on the facts and in the circumstances of the case, is not the order of the Tribunal for the assessment year 1987-88, one supporting the case of the Revenue for the assessment year 1986-87 ? 3. Whether, on the facts and in the circumstances of the case and in the light of the finding of the Tribunal in the order relating to the assessment year 1987-88 that the amount deposited in the treasury cannot form part of trading receipts and the balance remaining unpaid has to be treated as trading receipts should not the Tribunal have upheld the order of the assessing authority of the assessment year 1986-87 ?" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore issued annexure A3 order holding that those amounts which were not paid to the Sales Tax Department are includible in the ass total income for the assessment year 1986-87. Reliance was placed on the decision of the apex court in Chowringhee Sales Bureau P. Ltd. v. CIT [1973] 87 ITR 542; [1973] 31 STC 254 and Sinclair Murray and Co. P. Ltd. v. CIT [1974 97 ITR 615 ; [1974] 35 STC 142. 4 The assessee, aggrieved by the order of assessment, took up the matter in appeal before the Commissioner of Income-tax (Appeals). Before the Commissioner on behalf of the assessee reference was made to the order of the Income-tax Appellate Tribunal, Cochin Bench in I. T. A. No. 765ICoch./ 91, dated April 28, 1994, in respect of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,88,791 deposited in the Government treasury out of the total collection of Rs. 4,03,045 cannot be treated as part of the trading receipt and income of the assessee for this year. The balance of Rs. 14,254 has to be treated as trading receipt and hence income of the assessee for this year as the assessee has hot deposited the same till date." 6 As far as the present case is concerned, the assessee had not deposited the entire amount collected. Counsel referred to the assessment order and submitted that out of the sales tax collected only an amount of Rs. 3,23,138.37 was paid over to the Sales Tax Department. Similarly out of the additional sales tax amount collected only an amount of Rs. 46,593.73 was paid over to the Sales Tax Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt and had to be included in its total income. The court held that the amount released towards sales tax by the assessee formed part to the trading or business receipt since the true nature and quality of the receipt and not the head under which it is entered in the account books would prove decisive. 9 The collection of sales tax, additional sales tax and handling charges are taxable as trading receipts. The deduction of sales tax is governed by section 43B of the Income-tax Act. As per section 43B deduction is permissible only in the year in which such sums are actually paid over to the Government account. The sales tax realised by an assessee along with the sale price would be part of the trading receipts. The amount of sales tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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