M.G.MUKHERJI,ACTG.C.J. - (1.) IN DB Civil IT Ref. No. 36/89 the Revenue has preferred the following question by way of reference to this Court : "Whether, on the facts and in the circumstances, the Tribunal was right in law in holding that refund of excise duty amounting to Rs. 35,696.66 was not in the nature of income under S. 28(iv) or under S. 41(1) of the IT Act, 1961 -
(2.) IN DB Civil IT Ref. No. 37/89, the following question was referred to this Court for our considered opinion : "Whether, on the facts and in the circumstances, the Tribunal was right in law in holding that refund of excise duty amounting to Rs. 1,16,316 was not in the nature of income under S. 28(iv) or under S. 41(1) of the IT Act, 1961 - The assessee, M/s Wolkem Private Limited, Udaipur, is a private limited company, which carries on the business of exploiting Calcite and Wollastonite Mines and sells the same after converting them into powder. In the years under review the assessee had credited its profit and loss account on account of excise duty refund of Rs. 35,696.66 and Rs. 1,61,836 received by it. The assessee initially had shown it as an income in its return of income filed in the Department. During the course of assessment proceedings, the assessee raised its claim that the refund of excise duty is not liable to be taxed as income and placed reliance on the decisions in CIT vs. Alchemic Pvt. Ltd. (1981) 20 CTR (Guj) 83 : (1981) 130 ITR 168 (Guj) : TC 13R.1348 and CIT vs. Nathuabhai Desabhai (1981) 130 ITR 238 (MP) : TC 19R.160.
(3.) IN CIT vs. Alchemic Pvt. Ltd. (supra), the assessee was served with a notice for payment of excise duty paid by it, a part of which was recovered from its constituents. The assessee contended before the excise authorities that the duty was not payable by it and obtained a refund of the amount from them in a particular calendar year. The assessee credited this amount to its profit and loss account and claimed it as exempted on the ground that it was a casual receipt. This contention was rejected by the ITO, but the AAC accepted the assessee's claim. On further appeal, it was contended on behalf of the Revenue that the amount was taxable under S. 28(iv) or in the alternative, it was covered by S. 41(1) of the IT Act. The Tribunal held that before the claim could be considered under S. 41(1) some investigation would be necessary as the ITO had not considered the provisions of S. 41(1) at all. As altogether a new case requiring extensive investigation into the facts was sought to be made out, the Tribunal held that it would not be proper to allow the Department to agitate this point. The Tribunal also held that S. 28(iv) would not apply to the facts of the case and dismissed the appeal. On a reference, it was contended on behalf of the Revenue that the Tribunal was not justified in refusing permission to raise the question whether the amount was assessable under S. 41(1). It was held that while the Tribunal declined to allow the Revenue to go into the question arising under S. 41(1) on the ground that extensive investigation into the facts would be necessary, the Tribunal was sitting in the exercise of its jurisdiction. The considerations which led the Tribunal to its conclusion not to allow the Revenue to raise the contention under s. 41(1) viz. the necessity to investigate into the facts, would also apply to the question whether the amount was assessable under the general principles underlying S. 41(1). The Tribunal was justified in its conclusion that the question could not be considered from the point of view of S. 41(1) or the general principles underlying S. 41(1). It was further held in this case that the provisions of S. 29 (iv) would not apply to the instant case. Where the amount had been received in cash and the amount so realized was not taxable under S. 28(iv).;