TMI Blog1989 (1) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... he amounts collected as royalty were shown under a separate and distinct head in the balance-sheet, but they were neither treated as trading receipt nor was any deduction claimed in respect of them. On March 25, 1971, a Full Bench of our court in Amar Singh Modi Lal v. State of Haryana, AIR 1972 P H 356, held that no royalty was chargeable on the sale of bricks. The question thus arose with regard to this amount of Rs. 12,697 collected as royalty by the assessee. The Income-tax Officer included this sum in the income of the assessee for the assessment year 1972-73. This was upheld in appeal by the Appellate Assistant Commissioner. The Tribunal, however, took a contrary view and deleted this amount from the income of the assessee. This i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income in the hands of the assessee with effect from the date of the judgment of the High Court, that is, March 25, 1971, and consequently, this income fell to be included in the income of the assessee for the assessment year 1972-73. Reliance in this behalf was placed upon Motilal Ambaidas v. CIT [1977] 108 ITR 136 (Guj). The matter there pertained to the refund of a levy of sales tax to the extent of Rs. 42,263. The Supreme Court, by its judgment of January 20, 1964, held the particular levy of sales tax to be unconstitutional and as a result, the amount of the refund, namely, Rs. 42,263, was credited in the books of account of the assessee, who followed the mercantile system of accounting in Samvat year 2020, corresponding to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brother, S. S. Sodhi, but I would like to add my own reasons. As the acts show, no allowance or deduction was claimed in the three respective years ; no allowance or deduction was allowed by the Income-tax Officer while making the assessment pertaining to those years. The question arises as to whether section 41 (1) of the Act would be applicable. In Amar Singh Modi Lal's case, AIR 1972 P H 356 [FB], this court held that no royalty was chargeable on the sale of bricks. According to the decided cases referred to by my brother, S. S. Sodhi, section 41(1) of the Act is attracted only when deduction is claimed and allowed. To overcome the difficulty, the argument raised by counsel for the Revenue was that it should be deemed that indirectly a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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