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1 - 10 of 12 (0.71 seconds)Commissioner Of Income-Tax, Tamil ... vs Thirumalaiswamy Naidu And Sons. on 22 November, 1982
With due respect to the decision of the Madras High Court in the case of Thirumalaiswamy Naidu & Sons (supra), we are inclined to follow the decision of the Kerala High Court in the case of Marikar (Motors) Ltd. (supra). We do not think that for applying the provisions of Section 41(1), a distinction is required to be made between a case where the assessee had recovered the amount of sales tax or excise duty from its customers and a case where he had not so done. We are of the view that in either case, the provisions of Section 41(1) will become applicable in the case of refund.
E. D. Sassoon And Company Ltd vs The Commissioner Of Income-Tax,Bombay ... on 14 May, 1954
8. It is well settled that the amount recovered from the customer to compensate for the payment of excise duty or sales tax forms part of the dealer's turnover while the liability to pay sales tax or excise duty would be deductible as a business expense. We will draw attention to the following observation of the Supreme Court in the case of Chowringhee Sales Bureau (P.) Ltd. v. CIT [1973] 87 ITR 542:
Motilal Ambaidas vs Commissioner Of Income-Tax, ... on 27 February, 1976
9. We will also draw attention to the following observation of the Gujarat High Court in the case of Motilal Ambaidas v. CIT [1977] 108 ITR 136 at page 137 : "... that whenever any sale takes place, whether the price quoted to the purchaser includes sales tax or whether sales tax is separately collected, the sales tax forms part of the consideration for the sale and it forms part of the turnover of the seller. The amount of the sales tax payable in respect of the sales effected by a particular assessee forms part of his trading receipts and has to be shown on the credit side. As and when he pays the sales tax to the authorities, he can claim deduction for the sales tax paid ; in case he has to refund the sales tax to the original purchaser who purchased the goods from him, when the amount so refunded will also be a deduction which he can claim and it must be granted to him, that being deduction on the expenditure side...
Commissioner Of Income-Tax vs Saraswati Industrial Syndicate Ltd. on 15 April, 1975
10. Attention is also drawn to the decision of the Punjab High Court in the case of CIT v. Saraswati Industrial Syndicate Ltd. [1973] 91 ITR 501. It was held :
Ikrahnandi Coal Co. vs Commissioner Of Income-Tax on 22 February, 1966
11. The Calcutta High Court, in the case of Ikrahnandi Coal Co. v. CIT [1968] 69 ITR 488, had also taken the same view. The Calcutta High Court was of the view that the amount of sales tax, even though shown separately in the transaction of sale as sales tax, was part of the consideration which the seller charged for transfer of the property. The Calcutta High Court was of the view that the fact that the statute provides that the seller may collect sales tax did not rob the transaction of its trading character.
J.K. Synthetics Ltd. vs O.S. Bajpai, Income-Tax Officer, ... on 17 July, 1975
In the case of J.K. Synthetics Ltd. (supra) decided by the Allahabad High Court, the liability was still undischarged and the question that was examined was whether the liability of which the assessee was absolved by a judicial pronouncement could be said to have ceased, if an appeal against the judgment was pending. It was held that there was "cessation" of liability only when the liability had finally ceased without there being a chance of its revival. It was held that since the decision of the Single Judge of the Delhi High Court had not been accepted and a Letters Patent Appeal was pending, the liability could not be considered to have ceased. In the present case, the question is not whether there has been cessation of liability. In the present case, the liability had already been discharged. The amount paid by the assessee has been refunded to it and hence the question is 'whether the amount obtained by it in respect of an expenditure for which a deduction had been allowed earlier, should be treated as income under Section 41(1).
K.V. Moosa Koya And Co. vs Income-Tax Officer And Anr. on 30 August, 1988
19. The distinction drawn by the Gujarat High Court in the case of Rashmi Trading (supra) between a case where the refund had been received and a case wherein there had taken place remission or cessation of the liability had not been noticed by the Hon'ble Kerala High Court in the case of K.V. Moosa Koya & Co. (supra). The Gujarat High Court was categorically of the view that a refund is to be taxed on the basis of receipt notwithstanding the fact that the assessee had maintained its accounts on mercantile basis.
Commissioner Of Income-Tax, Gujarat-I vs Rashmi Trading on 23 December, 1975
19. The distinction drawn by the Gujarat High Court in the case of Rashmi Trading (supra) between a case where the refund had been received and a case wherein there had taken place remission or cessation of the liability had not been noticed by the Hon'ble Kerala High Court in the case of K.V. Moosa Koya & Co. (supra). The Gujarat High Court was categorically of the view that a refund is to be taxed on the basis of receipt notwithstanding the fact that the assessee had maintained its accounts on mercantile basis.
Sinclaire Murray & Co. (P) Ltd vs Commissioner Of Income Tax, Calcutta on 6 November, 1974
According to assessee's own saying, the matter of the assessee's liability to excise duty has not yet become final, since the decision of the Karnataka High Court has not been accepted by the Excise Department and an appeal is pending before the Supreme Court. The assessee has not established that any debt had accrued in favour of the customers. Under the circumstances, the question of allowing a deduction does not arise. We will draw attention to the decision of the Supreme Court in the case of Sinclair Murray & Co. v. CIT [1974] 97 ITR 615. In that case, it was stated by the assessee that the purchaser had paid sales tax to the assessee on the understanding that if ultimately no sales tax was exigible on those sales, the amount collected as sales tax was to be refunded to the purchaser. It was hence contended that the amount collected as sales tax could not belong to the assessee but had belonged to the purchaser and as such could not be treated as the income of the assessee. The Supreme Court held that the sales tax collected by the assessee was a trading receipt of the assessee and it was to be included in the computation of the income of the assessee. The Supreme Court observed that if and when the assessee paid the same either to the State Government or to the purchaser, it would be entitled to claim deduction of the sum so paid. Therefore, the plea of the assessee that since it was obliged to return the amount to the customers, the amount of refund could not be regarded as the income of the assessee, is not acceptable. When the assessee returns the amount to the customers or establishes that it had become liable to return the amount to the customers, a deduction for it would be admissible. But for the years under consideration, the assessee has not established that it had become liable to return the amount to the customers and hence the question of allowing any deduction does not arise.