JUDGMENT
1. The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law for the opinion of this court under Section 256 of the Income-tax Act, 1961 :
"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the amount of Rs. 44,777 on account of the difference between the enhanced price and old price of fertilisers in stock on May 31, 1974, and sold during the previous year could not be treated as the assessee's income for the assessment year 1976-77?"
2. The aforesaid question arises out of the order dated June 10, 1981, passed by the Tribunal in I. T. A. No. 975 (All) of 1980.
3. We have heard Sri Ashok Kumar, learned standing counsel for the Commissioner. No one has appeared on behalf of the respondent.
4. The Tribunal has stated the case as under :
The assessee is a registered firm dealing in fertilisers and the reference relates to the assessment year 1976-77. The prices of fertilisers were increased with effect from June 1, 1974. The Government of U. P., however, by notification ordered that in respect of the existing stocks on May 31, 1974, the sale of fertilisers will have to be made at the old rates and not the increased rates. This order of the Government of U. P. was challenged in a writ petition before the High Court of Allahabad and on being unsuccessful before the High Court of Allahabad, before the Supreme Court. The High Court of Allahabad as well as the Supreme Court in their interim orders while permitting the dealers to charge enhanced prices on the sales of fertilisers in stock on May 31, 1974, directed that the difference between the increased prices and the old prices should be deposited within a fortnight after the sale in an account pledged with the District Magistrate and the disposal of this amount will be in such manner as decided by the High Court and later on by the Supreme Court. It was claimed before the Income-tax Officer that the difference amounting to Rs. 44,777 between the enhanced prices and the old prices on sales of fertilisers in stock on May 31, 1974, during the previous year which was deposited in a separate account pledged with the District Magistrate could not be treated as the assessee's income for this year. The Income-tax Officer, however, did not accept this claim and added this amount while computing the assessee's business income.
5. Hereto annexed marked annexure A and forming part of the statement of the case is a copy of the assessment order.
6. The assessee was aggrieved by the assessment order and, therefore, went up in appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner, however, agreeing with the Income-tax Officer, refused to interfere and dismissed the assessee's appeal.
7. The assessee was not satisfied with the order of the Appellate Assistant Commissioner and, therefore, came up in appeal before the Appellate Tribunal. The Appellate Tribunal followed with respect its earlier orders in numerous cases, e.g., in the case of Govind Prasad Prabhu Nath (I. T. A. No. 2126/All of 1975-76) and held that since the true nature of the amount of Rs. 44,777 will be clear only after the Supreme Court has given its judgment, till then it has to be treated as a mere deposit with the District Magistrate and, therefore, this amount could not be treated as the assessee's income for this year.
8. As is evident, the assessee realised the enhanced price in pursuance of the interim order passed by the High Court and the money was to be deposited in an account to be pledged with the District Magistrate. Therefore, the assessee's right to retain the money as its income had not been perfected. A similar controversy arose in regard to the price of levy sugar and the matter came to this court in Dhampur Sugar Mills Ltd. v. CIT [1991] 188 ITR 787, wherein it was held that the difference in the price of sugarcane directed by the High Court to be deposited in a separate account and the price fixed under the notification was taxable under Section 41(1) in the year in which it actually realised the amount and that the difference cannot be treated as income of the assessee in which such difference was realised as purchase price.
9. Following the aforesaid decision of this court, we answer the question as reproduced above, in the affirmative, i.e., in favour of the assessee and against the Revenue.