COMMISSIONER OF INCOME TAX AND THE DEPUTY COMMISSIONER OF INCOME TAX ASSESSMENTS, SPECIAL RANGE-4 Vs. BRINDAVAN BEVERAGES (P) LTD.

JUDGEMENT

(1.) THE revenue has come up in this appeal challenging the concurrent findings of the order passed by the Commissioner of Income Tax (Appeals), which has been affirmed by the Income Tax Appellate Tribunal, Bangalore, in ITA No. 861/BANG/96 dated 25.02.2004. The dispute is pertaining to the assessment year 1993 -94.

(2.) THE facts leading to this case are as hereunder: The Assessee is the company registered under the provisions of the Companies Act, 1956. The Assessee is engaged in the business of manufacturing of soft beverages. For the assessment year 1993 -94, the Assessee filed the return of income declaring loss. On 30.03.1993, the premises of the Assessee as well as its Directors was searched and certain incriminate documents were seized during the course of search. The matter was taken up for assessment. The Assessing Officer noticed that the books of accounts of the Assessee -company disclosed that it had received an approximate amount of Rs. 90 lakhs as 'Security Deposit' from some of the distributors towards wooden crates and bottles. Though there are several distributors to the Assessee -company, the revenue has entertained a doubt in regard to eight distributors on the ground that they are all fictitious persons and also on the ground that some of them are relatives of the Directors of the Assessee -company. Some of them are retired employees of the Assessee -company and some of them are employees. Based on the same, the amount of Rs. 90 lakhs received under the head 'Security Deposit' was treated as income of the Assessee. Similarly, the Assessing Officer has deleted the expenditure claimed by the Appellant under the head 'bottle breakage' amounting to Rs. 3,98,012/ - and also a sum of Rs. 4,37,571/ - claimed as depreciation on account of damage caused to the wooden crates and cost of repairs. Accordingly, these depreciation were not accepted and they were treated to be the capital expenditure and the same was disallowed. An order of assessment came to be passed on 07.03.1996.

(3.) WE have heard the learned Senior Counsel Mr. Indra Kumar for the revenue and the learned Counsel Mr. Shankar for the assessee.