(Appeal by special leave from the judgment and order dated December 15, 1975, of the Andhra Pradesh High Court in R.C. No.35 of 1974.

Income-tax---

----Income---Mercantile system of accounting---Sales tax collected but not paid -to Sales Tax Department ---Includible in the income of the assessee.--[C.I.T. (Addl.) v. T. Nagireddi & Co. (1976) 105 ITR 669 reversed on this point].

In the case of an assessee who maintains his accounts on the mercantile system, sales tax collected but not paid to the sales tax department pending adjudication of dispute over his liability to pay sales tax, is a revenue receipt of the year in which it is collected.

Jonnalla Narashimharao & Co. v. C.I.T. (1993) 200 ITR 588 (SC) fol.

C.I.T. (Addl.) v. T. Nagireddy & Co (1976) 105 ITR 669 reversed on this point.

Dr. V. Gauri Shankal, Senior Advocate (S. Rajappa, C. Ramesh and P. Parameswaran, Advocates with him) for Appellant.

A Subba Rao, Advocate for Respondent.

ORDER

In this case there is only one question, namely, whether the sales tax amount collected by the assessee is includible in the income of the assessee. As held by us in C.N. Nos. 2468 to 2471 of 1977 (Jonnalla Narashimharao & Co. v. C.I.T. (1993) 200 ITR 588 (SC)), it is includible. The appeal is allowed. No costs.

M.BA./52/TFAppeal allowed.