Income-tax ---

----Income---Accrual---Assessee engaged in business of manufacture of sugar---Amounts received by assessee in excess of price fixed by Government for levy sugar and kept in suspense account pending disposal of writ petition filed by assessee against fixation of price by Government---Dismissal of writ petition and excess amount received by assessee becoming liable to be refunded---Excess amount collected not trading receipt liable to tax.

Amounts received by the assessee in excess of the price fixed by the Government and kept-in a suspense account pending the disposal of a writ petition filed by the assessee against the fixation of the price of levy sugar by the Government, and which, on the dismissal of the writ petition, became liable to be refunded, could not be said to form part of the trading receipts of the assessee.

C.I.T. v. Mysore Sugar Co Ltd. (1990) 183 ITR 113 (Kar.) fol.

G. Chandrakumar and S. R. Shivaprakash for the Commissioner.

G. Sarangan and Gajendra Rao for the Assessee.

JUDGMENT

The common question which is required to be answered by us in these references under section 256(1) of the Income Tax Act, 1961, reads:

"Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the excess collection realised towards levy sugar price does not represent part of the turnover of the assessee and there is no justification for inclusion of those amounts in the gross total income of the assessee?"

It was submitted by learned counsel that similar question being the subject-matter of reference in CIT v. Mysore Sugar Co. Ltd. (1990) 183 ITR 113 (Kar.) has been answered in the affirmative and against the Revenue. Hence following the said decision, we answer the question referred for our decision in these references in the affirmative and against the revenue.

M.BA./2388/TReferences answered.