ASWATHIAH B V Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference is under s. 256(1) of the IT Act, 1961, at the instance of the assessee, by the Tribunal, Bangalore Bench. The question that is referred to us is as under :

(2.) THE relevant assessment year is 1979-80. THE assessee received a central excise duty refund of Rs. 1,96,958 on 18th Sept., 1978. THE IAC brought this amount to tax and, by his order dt. 5th March, 1982, he stated that this amount of refund was not paid to the customers even as, on that day up to 5th March, 1982, there was no agreement to make such refund and this amount was not shown in the books or the P & L account as well. THE assessee contended that this amount of excise duty refund not being profit could not be included for the purpose of tax under s. 41(1) of the Act. THE other contention was that the assessee had claimed only a refund of Rs. 11,474 and that at the most only that amount could be included for the computation of tax. Both the contentions were rejected and the said order dt. 5th March, 1982, was passed. THE assessee filed an appeal before the CIT (1980) 17 CTR (A). THE CIT (A) referring to the decisions in Taj Gas Service (All) 91 : (1980) 122 ITR 1034 (All), Rashmi Trading (1976) 103 ITR 312 (Guj) and Motilal Ambaidas (1977) 108 ITR 136 (Guj) agreed with the conclusions arrived at by the IAC and dismissed the appeal by his order dt. 16th Nov., 1983. THE assessee not being satisfied with this order passed by the CIT (A) took up the matter before the Tribunal. THE Tribunal, after considering the contentions urged by the assessee as well as by the respondent, held that there was no ground to interfere with the order passed by the CIT (A). Added to this, the Tribunal, relying on the judgment of this Court in CIT vs. Kabbur Bros. (1981) 128 ITR 43 (Ker.), held that central excise duty refund can be placed on the same footing for the purpose of tax as in the case of refund of sales tax. Thus, the Tribunal confirmed the order passed by the CIT (A). THEreafter, the assessee made an application for making this reference.

(3.) ACCORDINGLY, we answer the question referred to us in the affirmative and in favour of the Revenue.