COMMISSIONER OF INCOME TAX Vs. KRISHI VIKAS

JUDGEMENT

(1.) THE Tribunal at the instance of the CIT, Allahabad, under S. 256(1) of the IT Act, 1961, has referred the following question of law for the opinion of this Court :

(2.) THE dispute relates to the asst. yr. 1975-76, During the year, the assessee inter alia dealt in the purchase and sale of fertilisers and seeds, etc. The assessment was completed by the ITO on a total income of Rs. 64,768. However, it was revised by the CIT purporting to exercise his power under S. 263 of the Act and he brought to tax an additional amount of Rs. 86,260 which represented an extra sale proceeds of the old stock of fertiliser held as on 31st May, 1974. It may be observed that the selling rates of the fertiliser were revised by the Central Government at a higher rate on 31st May, 1974, whereupon the State of Uttar Pradesh issued an Ordinance prohibiting the dealers in fertiliser to sell the old stock of fertiliser held by them immediately before the date when the rates were revised. However, the dispute was carried to the Supreme Court which permitted the dealers to sell their old stock on new rates and to deposit the excess amount in Post Office Savings Account in the name of the District Magistrate pending litigation before it. The amount of Rs. 86,260 which was added to the income of the assessee by the CIT, as stated earlier, represented the excess amount which the assessee had realised on the sale of old stock of fertiliser. The amount in dispute was deposited in the post office in the terms of the directions issued by the apex Court. There is no dispute so far these facts are concerned. On appeal the Tribunal reversed the decision of the CIT and held that the amount of Rs. 86,260 was not liable to tax in the hands of the assessee in the year in dispute pending litigation before the Supreme Court as it could not be said that the amount in dispute had accrued to the assessee as its income.