B.P.SARAF, J. - (1.) BY this reference under section 256(1) of the Income -tax Act, 1961, the Income -tax Appellate Tribunal has referred the following questions of law to this court for opinion at the instance of the assessee : '1. Whether, on the facts and in the circumstances of the case, the assessee was entitled to the deduct surtax payable by it under the Companies (Profits) Surtax Act, while computing the income from the business carried out by it under the Income -tax Act, 1961?
(2.) WHETHER , on the facts and in the circumstances of the case, the amounts received in the course of the business carried on by the assessee and later written back to the profit and loss account as unclaimed, partake of the nature of the trading receipts taxable under section 28(iv) of the Income -tax Act, 1961?' 2. The first question is covered by the decision of this court in Lubrizol India Ltd. v. CIT [1991] 187 ITR 25. Following the same, we answer this question in the negative and in favour of the Revenue. So far as the second question is concerned, the relevant facts pertaining to it are as under : The assessee is a private limited company. During the previous year relevant to the assessment year 1976 -77, the assessee credited to its profit and loss account a sum of Rs. 63,379. This amount comprised a sum of Rs. 7,429 deposited by the customers of the assessee in earlier years as advance for purchasing pumps. These parties, however, never turned up to buy the pumps or to claim the refund of the advance. Another sum of Rs. 4,321 represented excess commission received from the parties which was never claimed back by them. Another Rs. 13,249 was collected by the assessee on behalf of its principals, who never claimed the same from the assessee. The balance sum of Rs. 38,470 represented savings from remittances received from the foreign company towards the expenses of the directors in India which was not claimed back by the foreign company. This the sum of Rs. 63,379 representing the above amounts was appropriated by the assessee to its profit and loss account as it was of the opinion that this amount was not longer required to be returned to the third parties. Before the Income -tax Officer, the assessee contended that this amount, though credited to its profit and loss account, should not be included in its assessable income inasmuch as no deduction having been allowed in respect of the same in computation of its income in any of the earlier years, section 41 of the Act had no application. The Income -tax Officer, however, held that the amount of Rs. 63,379 represented the value of benefits received by the assessee in the ordinary course of business carried on by it and hence it was a treading receipt includible in the computation of the income of the assessee. The Income -tax Officer, therefore, disallowed the contention of the assessee and refused to deduct the same from the income of the assessee for determination of its total taxable income under the head 'Income from business.'
(3.) THE assessee appealed to the Commissioner of Income -tax (Appeals). The Commissioner of Income -tax (Appeals), however, confirmed the order of the Income -tax Officer. The assessee appealed to the Income -tax Appellate Tribunal. The Tribunal also confirmed the action of the income -tax Officer and the Commissioner of Income -tax (Appeals). Aggrieved by the order of the Tribunal, the assessee applied for reference of the controversy to this court for opinion under section 256(1) of the Act. The Tribunal has accordingly referred question No. 2 to this court.;