PARLE BOTTLING P.LTD ( NOW KNOWN AS PARLE AGRO P.LTD),MUMBAI vs. ACIT CEN CIR 25, MUMBAI

सुनवाई की तारीख / Date of Hearing: 18.08.2016 घोषणा की तारीख /Date of Pronouncement:28.10.2016 आदेश / O R D E R

PER AMARJIT SINGH, JM:

1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in treating deposit received in respect of bottles and crates as unexplained credit.”

3. The brief facts of the case are that the assessee filed the return of income declaring total income to the tune of Rs.Nil on 28.11.1997. The return was accompanied by audited profit and loss account, balance sheet and tax audit report u/s.44AB of the Income Tax Act, 1961 ( in short “the Act”). The return was processed u/s.143(1)(a) of A.Y. 1997-98 the Act on 30.03.1998. The case was selected for scrutiny, therefore, notice u/s.143(2) and 142(1) of the Act were issued and served upon the assessee. The assessee has shown a sum of Rs.3,51,072/- as the sum payable on account of receipt of deposit of bottles and crates. The assessee has explained that the said amount was received from its affiliate M/s.Parle Sales and Services Ltd. as deposit on the bottles and crates supplied to them. The particulars of the account is hereby mentioned below:- Particulars Amount Parle Sales & Services Ltd. Western Express Highway Andheri (E), Mumbai – 99 Deposits on Bottles 1,75,58,652 Deposits on Cases 72,96,429 Deposits on Bottles/Cases 7,22,083 Deposits on bottles 500 M.C. 7,91,147 Deposits on Cases 2,41,012 Deposits on plastic cases 85,05,750 3,51,15,073

4. On examination, it was found that the assessee has shown a sum of Rs.53,82,923/- as security in the relevant assessment year, therefore, the Assessing Officer asked to justify the claim seeking the name of the distributors, agents, parties etc to whom the securities was payable but the assessee failed to produce the parties or justify his &3689/M/2013 A.Y. 1997-98 claim of return of security, therefore the claim of the assessee was declined and the said security was considered as income of the assessee. In appeal the CIT(A) has allowed the claim of the assessee to the extent of evidence produced as the assessee justified the claim in connection with the 14 parties out of 27 depositors. The learned representative of the assessee has argued that Assessing officer was wrong in treating security in respect of bottles and crates as unexplained credit. It is specifically argued that the securities received from the parties in respect of bottles and crates is not liable to be treated as unexplained credit and is not also liable to be taxed specifically in view of the law settled by the Hon’ble Supreme Court of India in case of United Breweries Limited Vs. State of Andhra Pradesh decided on 04.03.1997 and Income Tax Appellate Tribunal, Madras in case of Siva Beverages Vs. Income Tax Officer 1991 38 ITD 125 Mad decided on 23rd April, 1991.

5. In view of the above said law, it is held that the deposit is retained as liquidated damages for the loss of the bottles. There is a clear intention not to sell the bottle, therefore the deposit cannot be considered as the price of the bottles. In view of the said law, we are also of the view that the deposit on security has been retained as liquidated damage for the loss of the bottles which is liable to returned to the bottle carriers but it is also necessary on the part of the assessee that he should prove his case of security by adducing sufficient and