- (1.) The assessee manufactures and sells shoes. For the assessment year 1966-67, it disclosed gross sales at Rs. 6,57,366 of which U. P. sales were of Rs. 2,57,738. All these sales were made by the assessee to the State Trading Corporation at Agra. The corporation paid the entire agreed price to the assessee. Subsequently, the corporation paid a sum of Rs. 21,316 to the assessee on account of devaluation of currency. The assessing authority brought this amount to tax as part of the turnover of the assessee in respect of sale of shoes on the footing that this amount formed part of the sale consideration. This view was upheld in appeal. The appellate authority held that the assessee received the amount because the price of goods in terms of rupees had increased.
(2.) The assessee went up in revision. The revising authority found : It seems that the State Trading Corporation, Agra, made purchases of shoes from the assessee. Thereafter the shoes were exported outside India. On account of devaluation, the corporation got more amount in terms of rupees. On receipt of the excess amount the corporation on its own accord distributed the same among its customers including the assessee. When the sale transactions took place between the assessee and the State Trading Corporation, there was no agreement between the parties that the assessee would get any amount on account of devaluation of rupees. The corporation was not bound to make any payment out of the money which it received on account of devaluation from ex-India parties. There is no material on record to show that the disputed amount formed part of the sale consideration.
(3.) On this ground, the inclusion of this amount in the turnover was held invalid.;