TMI Blog1956 (2) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... are bought and crushed into oil and the oil is then sold. The assessee was assessed to sales tax on the purchase of groundnuts and kernel used for the manufacture of oil and also on the sales of oil. The assessee is entitled to a rebate of the sales tax paid on groundnuts and kernel purchased and used for the manufacture of oil on furnishing the necessary particulars to the assessing authority. The assessee adopted a system of paying sales tax provisionally, calculated on the turnover of the previous accounting year and having the liability adjusted at the end of the accounting year on the basis of the actual turnover in the accounting year and after taking into account the rebate allowable on the value of groundnuts and kernel crushed int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment of income-tax for the assessment year 1946-47. Till the chargeable accounting period ended on 17th October, 1944, the assessments to excess profits tax were also made on the same basis as income-tax. However, for the chargeable accounting period 18th October, 1944, to 4th November, 1945, the Excess Profits Tax Officer allowed only ₹ 17,055 instead of ₹ 47,246 the provisional payment for sales tax made by the assessee. The sum of ₹ 17,055 allowed by the Excess Profits Tax Officer represented the actual liability for sales tax apportioned on time basis, for the turnover of the chargeable accounting period in question on the basis of the final assessments whose figures are given supra. Proceeding on this basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputation of profits made from the assessee's books and that the impugned amount represented one such head of expenditure. According to the Tribunal, rule 12 of Schedule I of the Excess Profits Tax Act hits the facts of the case truly and squarely ....and has been properly invoked to correct the anomaly created by allowing the entire sales tax payments in the corresponding income-tax assessment, even though the payments in question are only advances, not properly ascertained till 31st March, 1946 . The Tribunal further observed that if the Excess Profits Tax Officer had been so minded, he could have disallowed the whole amount of ₹ 47,276 instead of ₹ 30,22 r and that he took a compassionate view of the case. Now sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to anticipate the actual turnover of the year or the rebates likely to be granted to the assessee till the end of the year and it often happens that final assessments to sales tax are delayed for some months after the end of the year and the grant of refunds or rebates is delayed for more than a year after the end of the assessment year. The present case is an instance of a refund which was due in respect of the official year ended 31st March, 1945, being actually made on 18th April, 1946. The excess payments made by the assessee under the provisional assessments to sales tax were not due to any manipulation or subterfuge adopted by the assessee. Nor was the delay in getting a refund or rebate due to the inaction or indifference of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n purposes and does not relate to a method of making up the statutory return for assessment to income-tax. The section clearly makes such a method of accounting a compulsory basis for computation unless in the opinion of the Income-tax Officer the income, profits and gains cannot properly be deduced therefrom. It may be that the account maintained by the assessee is neither purely on a cash basis nor purely on a mercantile basis but is a mixture of the two methods, one method being adopted in respect of one class of transactions and the other in respect of a different category. If the assessee employs such different methods regularly and consistently the profits would have to be computed in accordance with the respective methods provided a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the provisional sales tax made during the official year ending 31st March, 1945, by bringing into the account of that year the rebates or refunds granted on 18th April, 1946, and entered in the assessee's books under that date. The further contention urged on behalf of the Commissioner of Income-tax is that under rule 12 of Schedule I of the Excess Profits Tax Act, in computing the profits of any chargeable accounting period, no deduction would be allowed in respect of expenses in excess of the amount which the Excess Profits Tax Officer considers reasonable and necessary having regard to the requirements of the business and that the Excess Profits Tax Officer acted under that rule in the present instance. It is no doubt true t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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