TMI Blog1984 (7) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case, the Tribunal was justified in confirming the disallowance of the claim of sales tax at Rs. 16,914 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in treating the sum of Rs. 16,914 as trading receipt ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that even in spite of following the mercantile system of accounting, the accrued liability of sales tax can be claimed on actual payment basis only ? " " ' B ' Assessment year 1979-80 : (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the disallowance of the claim of sales tax of Rs. 14,459 ? (2) Whether, on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n accepting the non-inclusion of that amount in the income of the company. In the assessee's accounts, sums of Rs. 16,914 and Rs. 14,459 were shown as credited in the sales tax account for the assessment years 1978-79 and 1979-80, respectively. The assessing officer added back these amounts in computing the assessee's business income for the aforesaid two assessment years. The Inspecting Assistant Commissioner of Income-tax (Assessment), Indore, for the assessment year 1978-79 for the period ending December 31, 1977, and for the assessment year 1979-80 for the period ending December 31, 1978, included Rs. 16,914 and Rs. 14,459 on account of excess sales tax collections. The assessee went up in appeal and the CIT (Appeals) confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Cal); Poonam Chand Trilok Chand v. CIT [1982] 136 ITR 537 (All). The income-tax authorities found that the amounts in question represent " excess sales tax collections " arising out of following the method of accounting adopted by the assessee-company. It appears that the sales tax collected by the assessee-company from its customers is directly credited to an account described as " sales tax account ". This account is debited as and when any sales tax is paid to the State Government. The assessee-company's contention before the CIT (Appeals) was that the sum represented an accrued liability which would be paid to the Sales Tax Department as and when it was quantified by way of sales tax assessment. The CIT (Appeals) did not accept this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the Revenue submitted that the assessee-company had not limited itself to showing the excess collections in the sales tax account as a liability, but has actually claimed it as deduction in computing its income. That such a claim is not admissible is clearly held by the Supreme Court in the decisions referred to above, namely, Chowringhee Sales Bureau P. Ltd. v. CIT [1973] 87 ITR 542 and Sinclair Murray Co. P. Ltd. v. CIT [1974] 97 ITR 615 and, therefore, the Tribunal declined to refer the question proposed by the assessee, in our opinion, rightly so, as they would be only academic and superfluous. Thus, after hearing the learned counsel and after going through the case law cited and after considering the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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