TMI Blog2002 (5) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961 (for short "the Act"), the appellant has sought determination of the following questions of law: "1. Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in law in dismissing the appeal of the Revenue whereby sustaining the findings of the learned Commissioner of Income-tax (Appeals) to the effect of the Central sales tax payable amounting to Rs. 1,59,807 as on December 31,1977, though being a revenue receipt was also simultaneously allowable as a deduction for the assessment year 1978-79 itself because of the mercantile system of accountancy being followed by the assessee? 2. Whether, on the facts and in the circumstances of the case, the learned Tribunal was justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral sales tax. After hearing the representative of the respondent, the Assessing Officer passed order dated September 26, 1990, vide which he made addition of Rs. 1,59,807. On appeal, the Commissioner of Income-tax (Appeals) passed order dated October 15, 1992 for deleting the said addition by recording the following observations: "I have given careful consideration to the entire matter and I have also gone through the combined order for all these years passed by the Income-tax Appellate Tribunal, Delhi Bench B. The additions made on account of sales tax have been deleted for all these years and the main discussion had been recorded in para. 9 and para. 13. The relevant extract is reproduced below: 'Any amount collected by an assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding receipts. Kedarnath Jute, on the other hand, says that the amount of sales tax payable by the assessee is allowable as a liability. Therefore, it is wrong to say that Chowringhee Sales Bureau affects the validity of Kedarnath Jute in any manner whatsoever. In these years, the Assessing Officer has brought to tax the difference between the collection and payment of tax. For the reasons discussed above, this was, in our view, not permissible and we, therefore, delete the additions made by the Assessing Officer in the reassessments on account of the sales tax . . . .' Respectfully following the view taken by the hon'ble Income-tax Appellate Tribunal, it is held that there was no justification for making disallowance of sales tax to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. v. CIT [1971] 82 ITR 363 and Chowringhee Sales Bureau (P.) Ltd.'s case [1973] 87 ITR 542. The Division Bench reversed the view taken by the learned single judge and held as under: "We have closely read both the decisions of the Supreme Court and are of the opinion that while in Kedar Nath's case [1971] 82 ITR 363, the manner of keeping mercantile system of accounting and claim of deduction of sales tax from the profits without making actual payments, was allowed, such a point did not directly arise in Chowringhee Sales Bureau's case [1973] 87 ITR 542. In Chowringhee Sales Bureau's case [1973] 87 ITR 542, the sole point for consideration was whether an auctioneer would be a dealer within the meaning of the Bengal Finance (Sales Tax) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s if a Bench of three judges had taken a view contrary to the decision of the two judges in Kedar Nath's case [1971] 82 ITR 363 (SC). The author who prepared the headnote of the Income-tax Reports has treated the aforesaid sentence as per curiam. We are of the view that the aforesaid sentence is a surplusage. In a later decision in Chowringhee Sales Bureau v. CIT [1977] 110 ITR 385, by the Calcutta High Court, the precise question, which is before us, arose relating to the same assessee, namely, Chowringhee Sales Bureau P. Ltd., who was also before the Supreme Court in [1973] 87 ITR 542. In Chowringhee Sales Bureau P. Ltd.'s case [1977] 110 ITR 385 for two later assessment years, Chowringhee Sales Bureau (P.) Ltd. collected certain amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case [1971] 82 ITR 363 (SC) and Chowringhee Sales Bureau (P.) Ltd.'s case [1973] 87 ITR 542 (SC), as in [1973] 87 ITR 542, the precise point was not under consideration. Accordingly, following Kedarnath's case [1971] 82 ITR 363 (SC) the two decisions of this court and of other High Courts referred to above, it is held that the Income-tax Officer had rightly allowed the deduction in the original assessment framed by him. Once the assessment orders were rightly framed, no case for rectification or for reopening under section 147/148 and 154/155 of the Act arises and the notices are clearly illegal and without jurisdiction." In our opinion, the aforesaid decision cannot be ignored by accepting the specious argument of Shri Sawhney that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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