TMI Blog2006 (2) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... sales tax to the State Government, it would still have been open to the assessee to seek refund if the assessee wished to claim such refund on the ground that the tax had been levied at a higher rate than the rate permissible. The fact that the assessee had chosen to adopt the device of labelling a part of the amounts collected towards its sales tax liability as "contingency deposit", could not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee?" The brief facts leading to the filing of the above appeal are as under. The assessee is running a tannery and is mainly doing job work, like getting raw skins from its customers and processing them in its tannery on behalf of the customers. During the assessment year, the assessee had collected a sum of Rs. 1,57,133 as contingency deposits from parties towards possible sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of collections of contingency deposits and allowed the appeal. Hence, the Revenue preferred the above appeal. Heard learned senior standing counsel appearing for the appellant, who states that the issue involved in this appeal is answered in favour of the Revenue by this court in CIT v. Southern Explosives Co. [2000] 242 ITR 107. It is settled law that if a receipt is a trading receipt th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of a receipt must be judged with reference to the reasons for the collection, and the liability for meeting which the collection was made. When the liability is a statutory one, the true character of the collection was a trading receipt. By calling a portion of the amount a deposit, it cannot be said that the assessee had constituted itself as a trustee, and therefore, the amounts received were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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