TMI Blog2008 (10) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... dealers was a debatable question. Therefore, in order to safeguard the business interest, the assessee had collected certain amounts towards the doubtful tax liability. The assessing authority for the assessment years 1988-1989 and 1989-1990 had found that the amounts received from the dealers towards doubtful liability is a disguised collection of additional sale price and that the books of account of the dealers show that payment of this additional amount was a part of the sales price. Therefore, the assessing authority held that the amount received towards anticipated tax liability is subject to assessment for tax. 3. The assessee had taken the premises of its sister concern along with machinery i.e., the boiler (Furnace) for manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal filed by the state before the tribunal regarding grant of partial deduction in the rental amount was dismissed. 6. The state in respect of the assessment year 1990-91 had filed the appeal and in respect of assessment years 1988-89 and 1989-90 had sought for reference on the following question of law. IN CP No.609/1996 (1) Whether, on the facts and in the circumstances of the case, the ITAT was right in law in deleting the addition of ₹ 43,10,591/- collected from the customers of the assessee over and above the invoice value, in view of the fact that such collections were made to meet the possible and apprehended sales tax liability on bottles and packing materials included in such invoice and in view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected from the customers of the Assessee over and above the invoice value, in view of the fact that such collections were made to meet the possible and apprehended sales tax liability on bottles and packing materials included in such invoice and in view of the further fact that the rate at which deposits were collected was in conformity with the rates at which sales tax was leviable in terms of the amended provisions of the Karnataka Sales Tax Act, 1957 on containers and packing materials ? 7. It is a categorical contention of the assessee that the amount in dispute was received from the dealers towards the doubtful tax liability. The assessee had also let in evidence of the dealers before the Assessing Authority that the advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curity deposit by the assessee was really an extra price for the bottles and was a part of the consideration for the sale of Liquor; it did not make any difference that the additional amount was entered in a separate ledger termed empty bottles return deposit account . It was held that these additional amounts, which remained after the refunds were made, were trading receipts of the assessee and liable to tax 9. The above extracted observation would indicate that the additional amount received by the assessee in the cited case as security deposit was in fact held to be in the nature of an additional price. After refund of security deposit amount, there was still some left with the assessee and the said amount was held to be the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X
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