TMI Blog2006 (10) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee - 51 of 1990 - - - Dated:- 30-10-2006 - ADARSH KUMAR GOEL, RAJESH BINDAL JJ. Yogesh Putney for the appellant. JUDGMENT 1. The following question of law has been referred for the opinion of this court by the Income-tax Appellate Tribunal, Delhi Bench "E", New Delhi (for short, "the Tribunal"), arising out of its order dated April 25, 1989, in ITA No.3280/Del./1986, for the assessment year 1981-82 : "Whether, on the facts and in the circumstances of the case and on a correct and true interpretation of section 41(1) of the Income-tax Act, 1961, the Appellate Tribunal erred in law in holding that the balance which remained outstanding in the sales tax account after the payment of sales tax assessed did not amount to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 41(1) of the Act. 4. We have heard learned counsel for the Revenue. 5. In Chowringhee Sales Bureau P. Ltd. v. CIT [1973] 87 ITR 542 ; [1973] 31 STC 254, the matter was considered by the hon'ble Supreme Court and it was held that the amount collected as sales tax formed part of trading or business receipt and if the said amount was not returned to the owner of the goods nor deposited with the Department, the amount will be treated as deemed income of the assessee, notwithstanding the fact that the amount was not shown as trading receipt in the accounts books. The same view has also been taken by the hon'ble Supreme Court in Chief CIT v. Kesaria Tea Co. Ltd. [2002] 254 ITR 434, Polyflex (India) P. Ltd. v. CIT [2002] 257 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation where the amount when received was not income but was treated as income later on principle, which has been enacted in section 41 of the Act. It was observed (page 353) : 'But, where a new asset came into being automatically by operation of law, common sense demanded that the amount should be entered in the profit and loss account for the year and be treated as taxable income. In other words, the principle appears to be that if an amount is received in the course of trading transaction, even though it is not taxable in the year of receipt as being of revenue character, the amount changes its character when the amount becomes the assessee's own money because of limitation or by any other statutory or contractual right. When such a th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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