THE COMMISSIONER OF INCOME TAX vs. M/S PURE DRINKS LTD

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ITA/150/2001HC Punjab & HaryanaPHHC01041999200129 April 2013Author: MR. JUSTICE HEMANT GUPTA,MS. JUSTICE RITU BAHRI2 pages
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What did the High Court hold?

The High Court answered the substantial question of law against the Revenue and in favour of the assessee. The Court held that the excess of 'security deposits' over 'refunds' received by the assessee on the sale of bottles is not a trading receipt. This decision was made by relying on a separate order passed by the same Court in the case of The Commissioner of Income Tax (Central), Ludhiana Vs. Munjal Gases, Hero Nagar, Ludhiana (ITR No.30 of 1994). The ratio decidendi from the Munjal Gases case, which addressed a similar issue, was applied. The operative direction was to answer the question of law in favour of the assessee, implying the ITAT's order was upheld on this point.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Patiala (Revenue) against an order passed by the Income Tax Appellate Tribunal (ITAT) on January 16, 2001, for the Assessment Year 1988-89. The assessee is M/s Pure Drinks (New Delhi) Ltd. The dispute concerns whether the excess of 'security deposits' over 'refunds' received by the assessee on the sale of bottles constitutes a trading receipt. The High Court was to decide a substantial question of law framed by the Revenue.

What were the issues?

1. Whether, in the facts and circumstances of the case, the ITAT was right in law in holding that the excess of 'security deposits' over 'refunds' received by the assessee on sale of bottles is not a trading receipt? (Question of law turning on the interpretation of trading receipts). Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue contended that the excess of security deposits over refunds received on the sale of bottles should be treated as a trading receipt. The judgment does not explicitly detail the Revenue's arguments beyond framing the question of law.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

IN THE PUNJAB & HARYANA HIGH COURT AT CHANDIGARH

ITA No.150 of 2001

Date of Decision: 29.04.2013

The Commissioner of Income Tax, Patiala

…Appellant Versus M/s Pure Drinks (New Delhi) Ltd.

…Respondent

CORAM: HON’BLE MR. JUSTICE HEMANT GUPTA

HON’BLE MS. JUSTICE RITU BAHRI

Present: Ms. Savita Saxena, Advocate, for the appellant.

M/s Akshay Bhan & Aalok Mittal, Advocates, for the respondent.

HEMANT GUPTA, J. (ORAL)

Present appeal under Section 260A of the Income Tax Act, 1961 (for short ‘the Act’) arises out of an order passed by the learned Income Tax Appellate Tribunal (for short ‘the Tribunal’) on 16.01.2001 in respect of Assessment Year 1988-89. The Revenue has raised the following substantial question of law: “Whether in the facts and circumstances of the case, the ITAT was right in law in holding that excess of ‘security deposits’ over ‘refunds’ received by the assessee on sale of bottles is not a trading receipt”

The said question of law is answered against the Revenue and in favour of the assessee by this Court vide separate order of today passed in ITR No.30 of 1994 titled ‘The Commissioner of Income Tax (Central), Ludhiana Vs. Munjal Gases, Hero Nagar, Ludhiana’. Kumar Vimal 2013.05.07 10:55 I attest to the accuracy and integrity of this document Chandigarh

2

Accordingly, the question of law is answered against the Revenue and in favour of the assessee in terms of Munjal Gases case (supra).

(HEMANT GUPTA)

JUDGE

29.04.

2013

(RITU BAHRI) Vimal Vimal Vimal Vimal

JUDGE

Kumar Vimal 2013.05.07 10:55 I attest to the accuracy and integrity of this document Chandigarh

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