TMI Blog1999 (11) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... lved are Rs. 58,75,999 for assessment year 1987-88 and Rs. 44,58,378 for assessment year 1986-87. 3. The assessee-firm is a processing house carrying on the business of dyeing and printing of cloths of merchants entirely on job work basis. It is not processing the cloth of its own. The grey cloth is supplied by the merchants i.e., owners of the cloth and after dyeing and printing it is returned to the respective merchants for which labour charges are recovered. In the process Excise Duty is leviable, It collects the Excise Duty from the merchants on the cloth processed for them by way of a separate debit note and the same is debited to excise account of merchant in separate ledger kept for the purpose. For the sake of convenience the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty on the condition that the assessee firm should furnish bank guarantee of equivalent amount to the excise department. In order to secure the bank guarantee, the assessee had to deposit the equivalent amount with the bank in Fixed Deposit. The position regarding the collecting of Excise Duty, fixed deposits with the bank and furnishing of the bank guarantee is shown as under :--- ---------------------------------------------------------------------------------------------------------------------------------------------------- Particulars 1985-86 1986-87 1987-88 ---------------------------------------------------------------------------------------------------------------------------------------------------- Deposit against 28,80, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee that ultimately after the decision of Supreme Court, the excise department encashed the bank guarantee and realised the amount against the deposits after encashing the fixed deposits as under :--- 13-3-1987 Rs. 52,15,270 (before the decision of the Hon'ble Supreme Court) 15-11-1988 Rs. 1,24,02,490. 4. The Assessing Officer considered the Excise Duty collection as part of the trading receipts of the assessee by applying the following case laws :--- 1. Chowringhee Sales Bureau (P.) Ltd. v. CIT [1973] 87 ITR 542 (SC). 2. CIT v. Saraswati Industrial Syndicate Ltd. [1973] 91 ITR 501 (Punj.). 3. P. Krishna Rao v. CIT [1978] 112 ITR 26 (AP). 4. Deccan Hides Skins Co. v. CIT [1983] 142 ITR 175/[1982] 11 Taxman 51 (Bom.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on given by the merchant/manufacturer. In this view of the matter, he considered that the facts of the assessee's case were distinguishable from the facts in Chowringhee Sales Bureau (P.) Ltd.'s case. He also relied in this connection on the decision of the Tribunal, Ahmedabad Bench in the case of Happy Trust, Surat v. ITO [IT Appeal No. 1650 (Ahd.) of 1986] and that of the Tribunal, Bombay Bench in the case of Sunil Silk Mills Ltd. v. Dy. CIT [1993] 46 ITD 4. 6. As regards the other contention relating to the applicability of section 43B, the CIT(A) gave his finding as under :--- "The contention of the ld. counsel of the appellant that even if the excise duty collected is treated as a trading receipt, the appellant has discharged its l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant is squarely covered by the ITAT, Delhi Bench decision in the case of New Chem Plastic Ltd. v. Dy. CIT [1992] 44 TTJ 261 also ITAT, Bombay Bench decision in the case of Sunil Silk Mills Ltd. v. Dy . CIT [1993] 46 ITD 4. Therefore, keeping in view all the facts and circumstances of the case, it is held that the Assessing Officer was not justified in treating the excise duty collected by the appellant from the merchant manufacturers as a trading receipt and bring the same to tax by invoking provisions of section 43B of the I.T. Act. Therefore, the additions of Rs. 58,999 and Rs. 44,58,378 made by the Assessing Officer for assessment years 1986-87 and 1987 88 respectively are deleted." 7. In the present appeals before us, the ld. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed by the Hon'ble Gujarat High Court in the case of Navjivan Udyog Mandir (P.) Ltd. v. CIT [1994] 207 ITR 40. In view of the binding ratio of these decisions we hold that the Assessing Officer was justified in treating the excise duty collected as a trading receipt of the assessee. Hence we are unable to agree with the finding given by the CIT(A) to the contrary on this aspect. So we reverse the order of the first appellate authority and restore the order of the Assessing Officer with respect to the nature of the trading receipt in question. 10. However, if the excise duty collected is treated as trading receipt a further point arises whether the assessee is entitled to deduction under section 43B in the circumstances mentioned above. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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