COMMISSIONER OF INCOME TAX Vs. SOMABHAI GELABHAI

JUDGEMENT

(1.) THIS judgment shall also govern the disposal of Misc, Civil case No 72 of 1971 (Commissioner of Income Tax, M. P. , Bhopal v. Vallabhbhai Bhikhabhai, Ujjain ). Both these references have been made by the Income tax Appellate Tribunal under section 256 (1) of the Income Tax Act, 1961.

(2.) IN Misc. Civil Case No. 46 of 1971 the facts as mentioned in the statement of case are as follows:-The assessee M/s Somabhai Gelabhai of Ujjain is a registered firm and deals in tobacco. It follows the Diwali year and the accounts are based on mercantile system as against cash system. The assessment year involved is 1961-62 for which the accounting period ends on the Diwali of 1960. The state Government by a notification, dated 23-10-1953 levied Sales Tax on imported tobacco. The levy of the Sales Tax was challenged before this Court as being in contravention of Article 304 (a) of the Constitution of India by this assessee as also by other tobacco dealers. In those petitions they also claimed a refund of the amount of Sales Tax which the dealers had paid to the state Government. These petitions including that of the assessee were allowed by a judgment dated 16-12-1959 of this Court and the State Government was directed to refund the amount of Sales Tax which was ilk gaily recovered. The amount to which the assessee was entitled for a refund was Rs. 28,758.

(3.) THE original assessment under section 23 (3) of the Act was completed on 5-2-1962 on a total income of Rs. 33,909. Income Tax Officer subsequently felt that as a result of the direction of this Court in the Misc. Petition, filed by the assessee, the amount of refund of Sales Tax accrued to him during the year of account which was neither disclosed by the assessee nor included in the computation of the total income by the Department. Therefore, proceedings under section 147 were initiated and after giving the assessee a reasonable opportunity, the amount of the Sales Tax refund was included in the income of the assessee for the assessment year 1961-62.