TMI Blog2007 (10) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... - AO rejected the contentions of the appellant – action of AO is correct – amount collected as contingent deposit was assessable as these are the trading receipts - 1407 of 2007 - - - Dated:- 30-10-2007 - K. RAVIRAJA PANDIAN and MRS. CHITRA VENKATARAMAN JJ. Venkatanarayanan for M/s. Subbaraya Iyer for the appellant. J. Narayanasamy for the respondent. JUDGMENT The judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer has added the contingent deposit, among other items. 3. During the relevant assessment year, the appellant collected a sum of Rs. 63,74,680 from its customers as contingent deposit. The collection was in anticipation of the sales tax liability which was in dispute. Since there was a contingent liability fastened on the deposit, the appellant did not treat the amount as trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he collection of sales tax for keeping it in a contingent deposit and treating the same as deposit would amount to income of the assessee or not was the subject-matter of consideration before this court in the case of CIT v. Southern Explosives Co. [2000] 242 ITR 107, wherein, the Division Bench of this court held that such a deposit would amount to revenue receipt. In order to come to the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Bench further held thus (headnote) : ". . . the amounts collected by the assessee were amounts which were meant to be utilised by the assessee for meeting its tax liability. Even if the assessee had paid over the entire amount received by it as deposit towards sales tax to the State Government, it would still have been open to the assessee to seek refund if the assessee wished to claim such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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