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2013 (11) TMI 229 - AT - Income TaxAddition on account of share deduction money - Assessee has not made payment of Rs. 59,81,538.84 to the Cane Growers as money was retained for the purpose of issuing share of the Society to such growers - Share deduction money account reflected in the balance sheet under the head share capital Held that:- The amount added by the Assessing Officer is Rs.1/- per quintal of sugarcane out of deduction from the payment made. The amount remains as share deduction money and when it reaches Rs. 1,000/- in each case, it is transferred to share capital account. The share capital is accordingly increased and this practice has been followed by the appellant for the last so many years. It is not the case of the department that the liability is ceased, rather the money -paid is to be converted into share capital and it cannot be said that it has become income of the appellant Addition deleted Decided against the Revenue. Addition on account of retention money Held that:- The retention money is basically the money retained to be set off against the penalty imposed, if the requisite supply is not made by the cane grower. If any penalty is levied on the cane grower, the same is squared up by way of transferring money from retention money account and the balance amount is paid to the members. It cannot be said that this amount, in any way, is income of the appellant Decided against the Revenue.
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