THE COMMISSIONER INCOME TAX vs. M/S PUNJAB BEVERAGES P LTD

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ITA/19/2004HC Punjab & HaryanaPHHC01051317200429 April 2013Author: MR. JUSTICE HEMANT GUPTA,MS. JUSTICE RITU BAHRI2 pages
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What did the High Court hold?

The Punjab & Haryana High 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 based on a separate order passed by the same Court on the same day in the case of Commissioner of Income Tax (Central), Ludhiana Vs. Munjal Gases, Hero Nagar, Ludhiana (ITR No.30 of 1994). The Court answered the substantial question of law against the Revenue and in favour of the assessee, following the precedent set in the Munjal Gases case. No specific reasoning from the Munjal Gases case is detailed in this judgment, but the principle applied is that such excess amounts are not to be treated as income.

What were the facts?

This appeal under Section 260A of the Income Tax Act, 1961, concerns the Assessment Year 1993-94. The appellant is the Commissioner of Income Tax, Patiala, and the respondent is M/s Punjab Beverages (P) Ltd. The appeal challenges an order passed by the Income Tax Appellate Tribunal (ITAT) on July 15, 2003. The core of the dispute revolves around whether the excess of 'security deposits' over 'refunds' received by the assessee on the sale of bottles constitutes a trading receipt. The High Court is considering the substantial question of law raised by the Revenue.

What were the issues?

1. Whether, on the facts and in the 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). Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the fact that the High Court answered the question in favour of the assessee implies that the assessee would have argued that these amounts are not trading receipts. Revenue's Contention: The Revenue contends that the excess of security deposits over refunds received on the sale of bottles should be treated as a trading receipt. The Revenue has raised this as a substantial question of law before the High Court.

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.19 of 2004

Date of Decision: 29.04.2013

The Commissioner of Income Tax, Patiala

…Appellant Versus M/s Punjab Beverages (P) 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 15.07.2003 in respect of Assessment Year 1993-94. The Revenue has raised the following substantial question of law: “Whether on the facts and in the 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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