Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2006 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2006 (2) TMI 104 - MADRAS HIGH COURTExcess sales tax collected and retained as a deposit due to a dispute - accural of income - "(a) Whether, Tribunal was right in holding that excess sales tax collected and retained as a deposit due to a dispute cannot be taxed in the hands of the assessee? (b) Whether, the excess sales tax collected cannot be treated as a trading receipt of the assessee, in view of the fact that subsequently, the Supreme Court had directed that it should be either refunded to the customers or paid over to a charitable trust?" - It is a settled law that as long as the receipt of the amount by the assessee was clearly associated with a liability to refund the amount, such receipt of amount would not be characterized as an income and, therefore, the same cannot be taxed - In the instant case, the Supreme Court has more clearly held that the sum proposed to be taxed does not belong to the assessee at all and the same was directed to be refunded to the customers and any left over excess has to be paid to the charitable trust – therefore, we do not see any merit to entertain the appeals
|