COMMISSIONER OF INCOME TAX MYSORE Vs. LAKSHMAMMA

JUDGEMENT

(1.) At the instance of Commissioner of Income-tax, Mysore, Bangalore, the Income-tax Appellate Tribunal, Hyderabad Bench, in I.T.A. No. 5488 of 1958-59 on its file, referred to this court the question "whether the sum of Rs. 1,87,630 is, by is nature, taxable sum under the Indian Income-tax Act, 1922?" under section 66(1) of the Indian Income-tax Act, 1922 (to be referred to hereinafter as the "Act").

(2.) It would be appropriate to recast this question as follow :

(3.) The relevant facts as found by the Tribunal and set out in the statement of the case and the fuller statement of the case submitted to this court are as follow : The assessee was an excise contractor. He had liquor shops at Mahabubnagar, Macherala, Raichur and Narayanpettah. The kist due from him for Faslis 1357 and 1358 was O.S. 10,75,629. Out of this amount, the assessee paid O.S. 9,81,308 and claimed deduction of the same as revenue expenditure in the assessment years 1949-50 and 1950-51. Because of the Razakar troubles and the police action in the then Hyderabad State at the material time, the assessee could not tap all the trees allotted to him. On representation by the assessee, the Government agreed to refund a portion of the kist paid. The assessee claimed O.S. 4,26,122 as being refundable to him. The Government determined the refund due at O.S. 3,19,541. The refund order was passed in June, 1953. Out of this amount O.S. 1,00,689 was set off towards the amount due from the assessee (according to the assessee, it was only O.S. 94,384). The balance of O.S. 2,18,852 (the rupee equivalent being Rs. 1,87,577) was adjusted towards the kist due from the assessee for the months of June and July, 1953. The assessee credited this amount in his accounts which were maintained on cash-credit basis.