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1987 (12) TMI 6

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..... g that the sum of Rs. 11,98,787, received by the assessee on the sale of import entitlements represented only a capital receipt ?" The assessee is a company. For the income-tax assessment year 1974-75, its previous year ended on October 31, 1973. The assessee carries on the business in processing and sale of Virginia tobacco and also in ginning cotton and sale of lint and seeds. It also deals in pesticides. The assessee company also exports tobacco to outside countries on a large scale. In its assessment for the year 1973-74, the Income-tax Officer included a sum of Rs. 11,98,787 under the head "Business". The sum represented import entitlements sold by the company along with others. It may be mentioned that in respect of certain joint ex .....

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..... he Income-tax Officer included the entire sum of Rs. 11,98,787 in the assessment for the assessment year 1974-75. It is said that the amount was provisionally included. The assessee carried the matter in appeal to the Commissioner of Income-tax (Appeals) questioning the inclusion of the sum in excess of Rs. 5,15,140. The Commissioner accepted the assessee's contention and deleted the income of Rs. 6,82,966 from the assessment observing that in view of the Tribunal's order for the immediately preceding year, the amount is not liable to be taxed in the assessee's hands. The Revenue as well as the assessee filed appeals to the Tribunal. The Revenue's contention was that the assessee was liable to be taxed on the amount of Rs. 6,82,966 also. .....

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..... 2) is referred by the Tribunal for the consideration of this court. We may first clear the ground regarding the Revenue's claim for assessment of the sum of Rs. 6,82,966 which was the subject-matter of consideration for the assessment year 1973-74. We have already mentioned that the Tribunal held that the aforementioned sum pertains to the associates of the assessee and that the sum is assessable in their hands. Once the Tribunal's decision in this regard became final, it is not open to the Revenue to reagitate the same question. Even otherwise, the Tribunal found that the exports of tobacco were made by three groups of persons, including the assessee, and that the assessee's share therein was only 43%. In its order disposing of the appea .....

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..... e assessee is a trader. In relation to its business transactions involving export of tobacco to outside countries, the assessee became entitled to import entitlements. There is thus an intimate and direct connection between the business carried on by the assessee and the import entitlements received. It is not a case where import entitlements were received by a non-trader, as in the Madras Full Bench case Addl. CIT v. K. S. Sheik Mohideen [1978] 115 ITR 243. In that case, under the National Defence Remittance Scheme, persons remitting foreign exchange to this country became entitled to import entitlements. The import entitlements received in cases relating to that Scheme have nothing to do with the business carried on by a person. The entit .....

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