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TMI Blog1989 (11) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... and holding that the excess amount of Rs. 43,10,110 collected over and above the price of sugar fixed by the Government does not form part of the turnover and is not liable to tax under the Income-tax Act, 1961 ?" The facts leading up to the reference, in brief, are as follows : The assessee is a public limited company engaged in the business of manufacture of sugar. The Government of India, in exercise of its powers under the Essential Commodities Act, fixed the price of levy sugar produced for the season 1971-72 at Rs. 124.55 and Rs. 125.10 per quintal for the two varieties. The assessee challenged the legality of the said order in this court in Writ Petition No. 1634 of 1972 on the ground that the prices fixed by the Government were unr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rits, the assessee was free to make use of the funds as it thought fit. He took the view that the amount, in the assessment year 1974-75 for the accounting year ending on June 30, 1973, was liable to be fixed in that assessment year and given a set off in the assessment year 1977-78 when the Government had to refund this excess amount to the equalisation fund by June 30, 1976, along with interest at 121/2 per annum. Thug, he held that the order of the Income-tax Officer was erroneous and prejudicial to the interests of the Revenue and, therefore, he set aside the same. Against that order, an appeal was filed before the Tribunal. The Tribunal found that though there is force in the Revenue's contention that the excess amount was actually rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee, relying upon a decision of the Supreme Court in CIT v. Hindustan Housing and Land Development Trust Ltd. [1986] 161 ITR 524 as Also the decisions in CIT v. Chodavaram Co-operative Sugars Ltd. [1987] 163 ITR 420 (AP) and K. V. Moosa Koya and Co. v. ITO [1989] 175 ITR 120 (Ker), submitted that a distinction should be noticed between cases such as the one on hand where the right to receive payment is in dispute which is not merely a question of quantifying the amount to be received and the cases where the right to receive payment is admitted and the quantification only of the amount payable is left to be decided in accordance with settled or accepted principles and on that basis sought to distinguish the cases relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the provision of law relating thereto and not on the view which the assessee might take of his rights nor can the existence or absence of entries in the books of account be decisive or conclusive of the matter. The assessee who was maintaining accounts on the mercantile system was fully justified in claiming deduction of the sum of Rs. 1,49,776 being the amount of sales tax which it was liable under the law to pay during the relevant accounting year. It may be added that the liability remained intact even after the assessee had taken appeals to higher authorities or courts which failed . . . " (underlining by us). Thus, it is clear that the Supreme Court in this case was concerned as to when the liability accrued in regard to the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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