Kerala H.C : The petitioner-company is an assessee to income-tax. The respondent is the Revenue. We are concerned with the asst. yr. 1977-78.

Counsel Appeared

M. Pathrose Mathai & Joseph Vellappally, for the Petitioner : P.K.R. Menon for the revenue

K.S.PARIPOORNAN, J. :

The petitioner-company is an assessee to income-tax. The respondent is the Revenue. We are concerned with the asst. yr. 1977-78. The assessee received refund of sales tax, amounting to Rs. 72,535 during the previous year ended on December 31, 1976, relevant to the asst. yr. 1977-78. After deducting the amounts returned by the assessee to its customers, the balance was fixed at Rs. 59,772. This amount was brought to tax under s. 41(1) of the IT Act. The assessee pleaded that the provisions of s. 41(1) of the Act will not apply. This plea was negatived by the assessing authority, the AAC and by the Tribunal. The Tribunal found that an identical plea, on substantially similar facts, was negatived by a Bench of this Court in CIT vs. Marikar (Motors) Ltd. (1981) 19 ITR 1 (Ker). Based on the above decision, the Tribunal held that the matter stands concluded by the decision of this Court in Marikar (Motors) Ltd.’s case (supra), and so the sales-tax refund amount can be brought to tax under s. 41 (1) of the IT Act. Aggrieved by the appellate order passed by the Tribunal dated February 13, 1985, the petitioner filed an application under s. 256(1) of the IT Act, praying that the questions formulated in para 5 of the original petition may be referred to this Court for decision. The Tribunal, by order dated October 12, 1987, rejected the said application. Thereafter, the assessee has filed this original petition under s. 256(2) of the IT Act.

We heard counsel for the petitioner/assessee, Mr. Pathrose Mathai, as also counsel for the Revenue, Mr. P. K. R. Menon. We were taken through the Bench decision of this Court in Marikar (Motors) Ltd.’s case (supra). On a perusal of the said decision, it is evident that in almost similar circumstances, a Bench of this Court has held that the sales-tax refund amount can be brought to tax under s. 41(1) of the IT Act. In that case also, the payment to the sales-tax Department was not debited to the P & L a/c. The sales-tax amount collected by the assessee from the customers was credited to a separate account as in this case. Even so, a Bench of this Court held that the refund of sales-tax received in the accounting year is income of the year in which it was received. Sec. 41 (1) of the IT Act was held to be applicable. In the light of the Bench decision of this Court in Marikar (Motors) Ltd.’s case (supra), we are of the view that no referable question of law, as formulated in para 5 of the original petition, arises for consideration. We are further of the view that the decision of this Court in Marikar (Motors) Ltd.’s case (supra), is substantially in accord with the earlier Bench decision of the Gujarat High Court in Motilal Ambaidas vs. CIT 1977 CTR (Guj) 165:(1977) 108 ITR 136 (Guj).

The original petition is without merit. It is dismissed.

[Citation : 178 ITR 175]