Commissioner of Income Tax vs Mahabir Sugar Mills (P.) Ltd.

B.P. Jeevan Reddy, C.J.—u/s 256(2) of the Income Tax Act, 1961, the Tribunal has stated the following question :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the extra amount of Rs. 2,62,651 realised on enhanced price of sugar had not accrued in the assessment year 1973-74 and, as such, did not form part of the income of the assessee for that year ?"

The assessee is a private limited company engaged in the manufacture and sale of sugar. For the assessment year 1973-74, the assessee had kept an amount of Rs. 2,62,659 in a suspense account in the name of the District Magistrate in the State Bank of India in pursuance of the orders of this court in a writ petition. The writ petition was filed by the assessee questioning the levy price fixed by the Government. It wanted a higher price. The assessee was allowed to collect the higher price but subject to the condition that he should deposit the difference between the price fixed by the Government and the price claimed by him in a suspense account. The question is whether, in such a case, such amount constitutes the income of the assessee for the said assessment year. An identical question has been answered by a Bench of this court in Dhampur Sugar Mills Ltd. Vs. Commissioner of Income Tax, , in favour of the assessee. There, it was dealt with as question No. 5. The facts are practically identical.

Following the said decision, the question referred is answered in the affirmative, i.e., in favour of the assessee and against the Revenue.

The reference is answered accordingly.