ORDER R.K. Agrawal, J.
The Income Tax Appellate Tribunal, Allahabad has referred the following two questions of law under section 256(1) of the Income Tax Act, 1961, hereinafter referred to as the Act, for opinion to this Court:
"1. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that amount of Rs. 8,75,599 realized by the assessee in excess of the sale price fixed by the State Government was not a trading receipt in the assessment year 1974-75?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount of Rs. 2,68,956 realised by the assessee as Excise Duty on the excess amount of sale price which was never refunded to the Government/parties is not the income of the assessee in the year under consideration?"
2. Briefly stated the facts giving rise to the present Reference are as follows:
2. Briefly stated the facts giving rise to the present Reference are as follows:
The present reference relates to the assessment year 1974-75. During the year in question the respondent had realised a sum of Rs. 8,75,599 on sale of levy sugar by an interim order passed by this Court. The amount was not credited to the profit and loss account on the ground that this court would decide the disposal of the additional amount in due course. The respondent claimed that the amount cannot be brought to tax. However, the Income Tax Officer treated the same as trading receipt. Similarly the respondent had realised a sum of Rs. 2,68,956 towards the excise duty on the excess amount on the sale of levy sugar price which was also treated as trading receipt by the Income Tax Officer. The Commissioner of Income-tax (Appeals) upheld the order of the Income Tax Officer. However, the Tribunal has held that the aforementioned amount do not found part of the trading receipt.
3. We have heard Sri A.N. Mahajan, learned Standing counsel for the revenue and Sri Vikram Gulati, learned counsel appearing for the respondent-assessee.
3. We have heard Sri A.N. Mahajan, learned Standing counsel for the revenue and Sri Vikram Gulati, learned counsel appearing for the respondent-assessee.
4. It may be mentioned here that this court in CIT v. D. Sugar Mills Ltd. (IT Reference No. 18 of 1983, dated 25-8-2004), which related to the assessment year 1974-75 and in which the High Court had passed an interim order in the same terms, has held that the amount realised on the excess amount on the sale of levy sugar price and the excise duty thereon do not found part of the trading receipt. So far as the excise duty is concerned, it may be mentioned here that if the principal amount of the excess amount on the sale of levy sugar price does not form part of the trading receipt the amount of excise duty which is leviable to such excess amount on the sale of levy sugar price would not also be found part of trading receipt.
4. It may be mentioned here that this court in CIT v. D. Sugar Mills Ltd. (IT Reference No. 18 of 1983, dated 25-8-2004), which related to the assessment year 1974-75 and in which the High Court had passed an interim order in the same terms, has held that the amount realised on the excess amount on the sale of levy sugar price and the excise duty thereon do not found part of the trading receipt. So far as the excise duty is concerned, it may be mentioned here that if the principal amount of the excess amount on the sale of levy sugar price does not form part of the trading receipt the amount of excise duty which is leviable to such excess amount on the sale of levy sugar price would not also be found part of trading receipt.
5. Respectfully following the aforesaid decision of this Court, we answer the above questions referred to us in the affirmative i.e., in favour of the assessee and against the revenue. However, there shall be no order as to costs.
5. Respectfully following the aforesaid decision of this Court, we answer the above questions referred to us in the affirmative i.e., in favour of the assessee and against the revenue. However, there shall be no order as to costs.