TMI Blog1994 (12) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 14,96,130 being the excess realisation over and above the authorised price on sale of sugar ? " The assessee-company manufactures items like sugar and so on. In the assessment year 1972-73, the company collected an amount of Rs. 14,96,130 as the price of sugar which was in excess of the levy sugar price fixed by the Government for that year. The levy price fixed by the Government was challenged by the company and the said litigation was pending in the Supreme Court. The amount of Rs. 14,96,130 represents the amount in dispute, being the price over and above the price fixed by the Government. The company was allowed to recover the excess amount subject to supply of bank guarantee as per the order of the court. The Income-tax Officer t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government nor refunded it to the purchasers. The amount was collected by him under the head " Sales tax collection account " and accordingly credited in his account books. He contended that the statutory provision casting the liability to collect the said tax was not at all valid. The Supreme Court held that the sum realised as sales tax by the assessee formed part of its trading receipt. It was further observed that the appellant would, of course, be entitled to claim deductions of the said amount as and when it would pay the said amount to the State Government. Similar was the ratio in Sinclair Murray and Company Private Limited v. CIT [1974] 97 ITR 615 (SC), where the assessee having its head office at Calcutta sold jute in Orissa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d authorities may, therefore, be considered carefully now. We think, on a careful consideration, that these authorities do not apply to the facts and circurmstances,of this case. We propose to elaborate the reasons for this opinion of ours. The first case, which has been relied on is CIT v. Hindustan Housing and Land Development Trust Ltd. [1986] 161 ITR 524 (SC). The amount in dispute in this case was not permitted to be withdrawn by the assessee. The amount was lying in a separate account and there was no absolute right to withdraw the said amount which was lying in deposit. The amount in dispute was the subject-matter in a litigation before the Supreme Court. Thus, the disputed receipt was not in the hands of the assessee at all. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion as per the mercantile system. It will thus be seen that the assessee was not in actual and real or full control of the amount which was collected in excess of the price fixed by the Government. The assessee was fettered by the court order which directed him to keep the amount in a separate account. Manifestly it could not be a receipt in the hands of the assessee. In Dhampur Sugar Mills Ltd. v. CIT [1991] 188 ITR 787, the Allahabad High Court directed that the excess of price of sugar collected by the assessee, on the strength of the interim order of the court, was to be kept in an account to be opened in the name of the District Magistrate and the assessee-company was not to operate the said account. This amount, the court held, coul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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