Itta/83/2007 Of The Commissioner Of Income Tax Iii v. Srinivas Poultry And Cattle Feeds Pvt. Limited

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENTTHE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.83 OF 2007 DATED: 06-02-2014 Between: The Commissioner of Income Tax-IIIHyderabad … Appellant And Srinivasa Poultry & Cattle Feeds Pvt. Ltd.,Hyderabad … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.83 OF 2007 JUDGMENT:(per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal was admitted by the order dated 01-03-2007without formulating the substantial question of law to decide theappeal. We think the appeal should not have been admitted. Anyway, as the appeal has been admitted, we are bound to hear it. 2. The appeal is directed against the judgment and order of thelearned Tribunal dated 10-02-2004 in relation to the assessment year1996-97. This appeal was sought to be agitated on the followinggrounds/questions of law: “(1). Whether the finding of the ITAT that the sales tax refundthough credited by the Assessee in its Profit and loss Accountbut claimed as not taxable in favour of the Assessee, issustainable in terms of Sec.41(1) r/w. Sec.5 of the I.T. Act on thesole ground that the W.P. filed by the sale tax departmentchallenging the STAT order is pending before this Hon’bleCourt ? (2). Whether the finding of the Tribunal upholding the deductionclaimed by the Assessee for analysis charges is sustainable inlaw u/s.80.JJ of I.T. Act ? (3). Whether the finding of the Tribunal allowing the depreciation on poultry sheds and other items covered by para.11 of its order are sustainable in law ? (4). The other grounds would be urged at the time ofarguments.” 3. Sri B. Narasimha Sarma, learned counsel appearing for theappellant, has argued on the first question only and did not argue onany of the remaining questions. So decision is taken by us thereon. 4. On the first question, Sri Sarma, learned counsel, says thatthe Tribunal should have held that the refund of tax amount paid earliershould be treated as an income as it has been shown in the books ofaccounts. The assessee, without any dispute, is maintainingmercantile system of accounting. Therefore, it should have been taxedunder Section 41(1) of the Income-tax Act, 1961 (for brevity, ‘the Act’). 5. We are unable to accept his contention as all receipts ofmoney are not income. The nature of the receipt has to beunderstood. The tax which was realised by the sales tax authorityearlier was held to be illegal. As such, the same was returned. Themoney which was illegally collected from the assessee has only beenreturned to the assessee, meaning thereby, the assessee has notreceived any amount from an outsider. It was the receipt of his ownmoney. In order to make this sort of receipt of money taxable underSection 41(1) of the Act, one of the preconditions, which is relevanthere, is that it must be some benefit to the assessee. On the factualscore, it has been said that benefit has not been derived by theassessee. Hence, it is not an income within the meaning of Section41(1) of the Act. The learned Tribunal, in our view, has held correctlyand it does not call for any interference by this Court. 6. The appeal is accordingly dismissed. No costs. ______________________ K.J. SENGUPTA, CJ _____________________ SANJAY KUMAR, J 06-02-2014Svv