AJIT K. Sengupta, J. - (1.) In this reference under Section 256(1), of the Income-tax Act, 1961, relating to the assessment years 1984-85 and 1985-86, the following questions of law have been referred to us by the Tribunal : "Assessment year 1984-85 : 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the provision of Section 43B of the Income-tax Act was not applicable on amount collected by the assessee as sales tax which was neither refunded to the parties nor paid to the Government account within the relevant previous year ?
(2.) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amount collected by the assessee from the parties was 'deposit' and not sales tax when the Tribunal itself has viewed that ultimately the liability for payment of sales tax through assessment can be placed on the assessee ?" "Assessment year 1985-86 : 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount collected by the assessee on account of customs duty payable by the assessee on behalf of the parties but not paid within the previous year was not hit by the provisions of Section 43B of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that if the goods are imported on behalf of the parties, customs duty attached to such import does not become the liability of the assessee, when in the instant case the assessee advanced bank guarantee as per direction of the hon'ble court for the disputed portion of customs duty and received the equal amount from the parties inasmuch as the assessee has to pay such customs duty if the hon'ble court finally directs to make such payment ?" 2. In fact, there are two issues covered by the four questions, one relating to includibility in the total income of the deposit of sales tax under Section 43B of the Act, common to both the assessment years, the other relating to includibility of customs duty collected by the assessee from third parties for whom the assessee acted as an authorised agent for the imports, in terms of Section 43B of the Act, as part of the total income from the assessment year 1985-86.
(3.) The assessee, a resident Indian company, was assessed in respect of the two assessment years, viz., 1984-85 and 1985-86, under Section 143(3) on June 11, 1986, and July 23, 1986, respectively. The said assessments were, however, set aside by the Commissioner under Section 263 as the Income-tax Officer completed the assessments without making the additions which the Commissioner considered to be called for in view of the provisions of Section 43B. In the said order, the assessment was directed to be modified by way of additions to the total incomes of the following amounts : (i) Rupees 50,950 and Rs. 1,74,699 representing credits in "Sales tax suspense account" appearing in the balance-sheets relevant to the assessment years 1984-85 and 1985-86, respectively. (ii) Rupees 46,45,744 lying credited in "Collector of Customs (Party) account" appearing in the balance-sheet relevant to the assessment year 1985-86.;