TMI Blog2005 (9) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 256(1) of the Income-tax Act, 1961 ("the Act"), at the instance of both the assessee and the Revenue: At the instance of the assessee for: Assessment years 1981-82 and 1982-83: "Whether, on the facts and circumstances of the case, the Tribunal was justified in law in holding that the liability to claim deduction of Rs. 21,67,041 had not arisen and the assessee was not entitled to claim the same as such either in the assessment year 1981-82 or the assessment year 1982-83 based on final judgments of the Gujarat High Court and the Supreme Court of India and discharging of the said liability by payment?" At the instance of the Revenue: (i) For the assessment years 1978-79 to 1980-81 "Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to allow the provision of interest made by the assessee as deduction?" (ii) For the assessment years 1979-80 to 1983-84: "Whether the Appellate Tribunal is right in law and on facts in directing the Income-tax Officer to allow deduction towards guesthouse expenses?" The assessment years are 1978-79, 1979-80, 1980-81, 1981-82, 1982-83 and 1983-84. The respective accounting periods are the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions. After hearing the parties and also considering the provisions of the Equalisation Fund Act, with special reference to the provisions of section 3(3) of the Equalisation Fund Act, the following direction was made: "The respondents are directed to credit to the levy sugar price equalisation fund the difference between the controlled price of Rs. 124.59 and the price recovered by them in respect of levy sugar sold by them to the Union Government, State Government or their nominees between July 31, 1972 and March 12, 1973. They shall also credit to that fund interest at the rate of 1.2% per cent, per annum on all excess realisations made by them. The interest shall run from the date or dates on which they made the excess realisation or excess realisations." This order was made on May 2, 1980. On the strength of this order the assessee made a claim for the assessment year 1981-82 and 1982-83 claiming a deduction of Rs. 21,67,041. According to the assessee the amount was allowable either in the assessment year 1981-82 or the assessment year 1982-83. The Assessing Officer rejected the claim and the assessee moved the Commissioner (Appeals) by way of additional grounds. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 134 for the proposition that the concept of reopening of accounts was unknown even for the purposes of tax laws. Thus, according to him, the assessee should be granted the deduction in one of the years under consideration as the accounts of the earlier years had already been finalized and closed. Lastly, it was submitted that if the claim is denied in the years under consideration the assessee would have no remedy despite the claim being a legitimate claim. Mr. B.B. Naik, learned standing counsel appearing on behalf of the Revenue, invited attention to the impugned order of the Tribunal as well as the judgment of this High Court rendered in civil applications filed by the Union of India to submit that the liability in question, under no circumstances, was relatable to the assessment years in question. That the liability was in fact relatable to the point of time when the excess realization had been made by the assessee. That by virtue of the provisions of and the orders made under the Essential Commodities Act the assessee was entitled to recover only the specified price and any excess recovered was liable to be returned, the recovery being illegal. He submitted that even oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issed the assessee's challenge to the aforesaid order made by the High Court. The appeal which was admitted by the apex court in relation to interest payable on such excess realization was finally heard and decided on February 10, 1999, as reported in Bileshwar Khan Udyog Khedut Shahakari Mandali Ltd. v. Union of India, AIR 1999 SC 1198. One of the contentions raised before the apex court is the same as that which has been raised before this court, viz., interim orders on the basis of which the excess amounts were realized by the assessee having not been set aside no liability to refund the same arose when the writ petitions were withdrawn on March 12, 1973. The apex court rejected the contention by holding the same to be wholly untenable and held that: "It is not disputed that on the dismissal of the writ petitions the interim orders passed therein automatically stood discharged.... In the present case when the High Court dismissed the writ petition the interim order passed therein became non-existent and inoperative." Hence, on March 12, 1973, the right which the assessee was exercising to collect amount more than the controlled price came to an end, and accordingly, at least o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 754 and Rs. 18,274, respectively. The same was disallowed by the Assessing Officer on the ground that it did not relate to any of the assessment years in question, while partially allowing a sum of Rs. 2,83,098 in the assessment year 1978-79. The assessee succeeded before the Commissioner of Income-tax (Appeals) and the said order has been confirmed by the Tribunal. As per the order made by the Assistant Commissioner of Sales Tax on April 29, 1974, the assessee was not required to pay any sales tax and, therefore, obtained a refund of sales tax paid amounting to Rs. 59,08,519. This amount was credited to the profit and loss account for the accounting period 1974-75. However, the Deputy Commissioner of Sales Tax issued notice dated February 4, 1975, seeking recovery of the said amount along with interest on the ground that the refund was wrongly issued. The assessee challenged the said order but did not succeed before the High Court. Subsequently, after negotiations, on August 29, 1975, an order came to be made by the Deputy Commissioner of Sales tax requiring the assessee to make payment of Rs. 59,08,519, which was admittedly paid in instalments. Thereupon, it appears that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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