TMI Blog2005 (7) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has reduced its amount of Rs. 11,80,973 from income claiming the fact that since write back was unilateral, this income is not includible in the income of the assessee. The amounts written back were the credits on account of minor balances remaining unpaid towards tobacco leaves suppliers, the unclaimed wages, bonus of workers, security deposit of old staff and sundry deposit without any interest and without any stipulation as to refund or even without any business purpose whatsoever in its books of account coming prior to 1977 and for the years later thereto. In the opinion, these credits were kept by the assessee in its fiduciary capacity and the money involved never intended to belong to the assessee in the asst. yr. 1996-97 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and, accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or (b) the successor in business has obtained, whether in cash or in any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first-mentioned person or some benefit in respect of the trading liability referred to in cl. (a) by way of remission or cessation thereof, the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed under the Limitation Act could not extinguish the debt but it would only prevent the creditor from enforcing the debt, has been well settled. If that principle is applied, it is clear that mere entry in the books of account of the debtor made unilaterally without any act on the part of the creditor will not enable the debtor to say that the liability has come to an end. Apart from that, that will not by itself confer any benefit on the debtor as contemplated by the section. Such views have been held by the Hon'ble Supreme Court in the case of CIT vs. Sugauli Sugar Works (P) Ltd. (1999) 152 CTR (SC) 46 : (1999) 236 ITR 518 (SC) which was also followed by the Hon'ble Supreme Court in the case of Chief CIT vs. Kesaria Tea Co. Ltd. (2002) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital nature at the point of time it was received, by efflux of times the money has become the assessee's own money. What remains after adjustment of the deposits has not been claimed by the customers. The claims of the customers have become barred by limitation. The assessee itself has treated the money as its own money and taken the amount to its P L a/c. There is no explanation from the assessee why the surplus money was taken to its P L a/c even if it was somebody else's money. In fact, as Atkinson J. pointed out that what the assessee did was the commonsense way of dealing with the amounts." In the above case, the facts are different i.e., the assessee has not given any explanation why the surplus money was taken to its P L a/c ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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