Holding

Section 41(1) and Section 41(2) operate in different spheres; the balancing charge cannot be read into Section 41(1), so pre‑1995 bottles and crates are not taxable as a balancing charge, while post‑1995 assets are taxable as capital gains under Section 50.

Summary

The Supreme Court examined whether the "balancing charge" provision of Section 41(2) of the Income Tax Act, 1961 could be read into Section 41(1) to tax profits from the sale of fully depreciated bottles and crates when Section 41(2) was deleted for assessment years 1988‑89 to 1998‑99. It held that each sub‑section of Section 41 deals with distinct situations and the balancing charge cannot be subsumed under Section 41(1). Consequently, sale proceeds of bottles and crates purchased before 31‑Mar‑1995, which were not part of the block of assets, are not taxable as a balancing charge or under Section 50. Assets bought after 1‑Apr‑1995 fell within the block of assets after the Finance (No.2) Act, 1995 and are liable to capital gains tax under Section 50. The Court remitted the specific computation of Nectar Beverages to the Assessing Officer and allowed the appeals of the assessees.

Issues considered

The concept of "balancing charge" under Section 41(2) can be read into Section 41(1) for taxation of profit on sale of depreciable assets when Section 41(2) is deleted.
Whether profits on sale of bottles and crates purchased before 31‑Mar‑1995 constitute a balancing charge or capital gain.
Whether sale proceeds should be classified as "miscellaneous income" or "profits on sale of assets" for tax purposes.

Legislation cited

Income Tax Act, 1961s. 2(11), s. 31(1)(ii), s. 32(1)(ii), s. 41, s. 41(1), s. 41(2), s. 41(3), s. 41(4), s. 50

Subjects

balancing chargeSection 41depreciationblock of assetscapital gainsIncome Tax Actstatutory interpretationtaxability of sale of depreciable assets

Judgment

[2009] 9 S.C.R. 1174

A NECTAR BEVERAGES PVT. LTD.
v.
DEPUTY COMMISSIONER OF INCOME TAX
(Civil Appeal No. 5291 of 2004)

JULY 6, 2009
B
[S.H. KAPADIA AND AFTAB ALAM, JJ.]

Income Tax Act, 1961 - s. 41(1) and (2) - 'Balancing
_ charge' - Concept of-Assessment years 1990-91 - 1998-99
C -Purchase of bottles and crates before 1.4.1995, costing less
than Rs. 50001- - Sale proceeds of 100% depreciable assets
in subsequent years - Profit on sale of assets - Taxability of,
on account of deletion of s. 41 (2) - Balancing charge in s.
41(2), if could be read into s. 41(1) - Held: Each of the sub-
D sections to s. 41 deal with different and distinct circumstances
- One cannot read recoupment under one sub-section into
another- Bottles and crates purchased prior to 31.3.1995 not
part of block of assets, hence, profits on sale of assets not
taxable as balancing charge either uls. ·41 (1) ors. 50 - Bottles
E and crates purchased after 1.4.1995, on account of deletion
of proviso to s. 31 (1 )(ii), formed part of block of assets, thus,
exigible to capital gains tax uls. 50.

The question which arose for consideration in these
appeals pertaining to assessment years 1990-91 to 1998-
F 99, was whether the concept of 'balan_cing charge'-profit
on sale of depreciable asset, ins. 41(2) of the Income Tax
Act, 1961 could be read into s. 41(1) of the Act and be
taxed under the same, even though s. 41(2) stood deleted
between the assessment year 1988-89 to 1998-99.
G
Disposing of the appeals, the Court

HELD: 1.1 Section 41 of the Income Tax Act, 1961 falls
under Chapter IV which deals with computation of
H 1174
NECTAR BEVERAGES PVT. LTD. v. DEPUTY 1175
COMMISSIONER OF INCOME TAX

business income. It has a Head Note which says "Profits A
chargeable to tax". Section 41 (1 ). has remained
unchanged, both, before 1.4.1988 and even after
1.4.1998. Section 41(2), however, stood deleted between
assessment years 1988-89 and 1998-99 for about ten
years. Under s. 41(1), where any allowance or deduction B
has been made in the assessment for any year in respect
of loss, expenditure or trading liability incurred by the
assessee, and subsequently during any previous year
the assessee had obtained, such loss or expenditure in
respect of such trading liability by way of remission or c
cessation thereof, the amount obtained by him, shall be
deemed to be income of that previous year in which the
recoupment takes place. It cannot be said that
notwithstanding, the deletion of s. 41 (2), since the
assessee had obtained the benefit of depreciation in the 0
earlier years as allowance or deduction in respect of
expenditure incurred by it when it bought bottles and
crates, on recoupment in the assessment years in
question, such recoupment was liable to be taxed as
deemed income under s. 41(1). Prior to 1.4.1988, s. 41(1) E
and s. 41(2), both, existed on the statute book. Section
41(2) specifically brought to tax the balancing charge as
a deemed income under the 1961 Act. It stated that where
any plant owned by the assessee and used for business
purposes was sold, discarded or destroyed and the
moneys payable in respect of such plant exceeded the F
written down value, then, so much of the surplus which
did not exceed the difference between the actual and the
written down value was made chargeable to tax as
business income of the previous year in which moneys
payable for the plant became due. If the submission of G
reading the balancing charge under s. 41(2) into s. 41(1)
was to be accepted then it was not necessary for
Parliament to enact s. 41(2) in the first instance. In that
event, s. 41(1) alone would have sufficed. Section 41(1),
s. 41(2), s. 41(3) ands. 41(4) operated in different spheres. H
1176 SUPREME COURT REPORTS [2009] 9 s.c:R.

A Each of the sub-sections to s. 41 deal with different and f
distinct circumstances. Therefore, one cannot read
recoupment under one sub-section into another. [Para 8]
[1182-D-H; 1183-A-F]
/

1.2 Where any allowance or deduction had earlier
B
been made in respect of any loss, expenditure or trading
liability and subsequently the assessee has obtained or
realized any amount towards such loss, expenditure or
t
trading liability, s. 41(1) of the Act deems such realization/
recoupment as assessee's: income for the year in which
c it is realized. Section 41(2) as it stood at the material time
stated that if in respect of any plant and machinery, any ·
depreciation had been allowed and subsequently such
plant and machinery was sold, discarded or destroyed,
the assessee might get some value either as a result of
D sale or insurance or from salvage or compensation
thereabout. The necessity to keeps. 41(2) as a provision
in addition to s. 41(1) arose from the fact that, in its very
nature, depreciation is neither a loss, nor an expenditure,
nor a trading liability, referred to in s. 41 (1 ). The
E depreciation recovered on sale of the capital asset was
includible in the total income as balancing charge only
under s. 41(2). That concept was foreign to the scheme
of s. 41(1). The balancing charge under s. 41(2) arose only
where any depreciable asset (building, ,nachinery, plant
F or furniture) was sold. In fact, when the concept of "block
of assets" stood introduced w.e.f. 1.4.1988, s. 41(2) stood
deleted. However, even after 1.4.1988, the proviso to s.
32(1)(ii) continued till 1.4.1996 when by the Finance (No.
2) Act, 1995 the bottles and crates even below Rs. 5,000/
G - came within the "block of assets" as defined under s.
2(11) of the 1961 Act. [Para 9] [1183-G-H; 1184-A-E] ....

1.3 Four Civil Appeals fall in the period after 1.4.1996.
The Lead Matter in this category is Mis Goa Bottling
Company Pvt. Ltd. v. Asstt. Commissioner of Income Tax for
H
NECTAR BEVERAGES PVT. LTD. v. DEPUTY 1177
COMMISSIONER OF INCOME TAX

assessment year 1998-99. The said company bought A
' bottles and crates whose cost per unit did not exceed Rs.
""· 5,000/-. During the year ending 31.3.1998, the company
received a sum of Rs. 6,89,91,901 on sale of scrap bottles
and crates. The sale proceeds were segregated in two,
parts: in respect of bottles and crates purchased prior to B
31.3.1995; and those purchased after 1.4.1995. [Para 11]
[1184-G-H; 1185-A-D]
1 1.4 Bottles and crates purchased prior to 31.3.1995
did not form part of the bl9ck of assets, hence, profits on
sale of such assets were not taxable as a balancing c
charge, neither under s. 41(1) nor under s. 50. In respect
of bottles and crates purchased after 1.4.1995, on
·- account of deletion of proviso to s. 31 (1 )(ii) (vide Finance
Act, 1995) such bottles and crates formed part of block
of assets and consequently such assets purchased after D
1.4.1995, in this case, became exigible to capital gains tax
under s.50. [Para 12] [1185-F-H]
1.5 The case of Nectar Beverages Pvt. Ltd. is
remitted to the A.O. to go through the computation E
submitted by it and find out whether earmarking "profits
from sale of assets" as "miscellaneous income" resulted
in the understatement of net profits at the pre-section 28
~
stage and taxable profits at post-section 28 stage. In all
-- other cases, sale proceeds have been earmarked as
'profits on sale of assets' and in those cases, thus, there
F
is no question of verification by the A.O. [Para 13) [1186·
B-D]
CIVIL APPELLATE JURISDICTION : Civil Appeal No
5291 of 2004. G
~
From the Judgment & Order dated 10.02.2004 of the High
-r" Court of Bombay Bench at Panaji Goa in Income Tax Appeal
No. 14 of 2003.

WITH H
1178 SUPREME COURT REPORTS [2009] 9 S.C.R.

A C.A. Nos. 5296, 5293 of 2004, 356-357, 359-360, 361-362, i
· 363-364, 5858 of 2006, 108 of 2007 and 4130, 4131 & 4132
of 2009. ..A

S. cGanesh, V. Shekhar, A.A. Kulkarni, Ajay Aggarwal,
Kanika Gomber, Mallika Josehi, Rajan Narain, Dhruv Mehta,
B
Jayashree Wad,_ Ashish Wad, Chirag S. Dave, Satya Vikram,
Sameer Abhyankar (for J.S. Wad & Co.), H.R. Rao, Arijit
Prasad, Abhishek Tiwari, A. Deb Kumar and B.V. Balaram Das
-~
for the Appearing Parties.

c The Judgment of the Court was delivered by
S.H. KAPADIA, J. 1. Leave granted.
2. In this batch of Civil Appeals, pertaining to assessment
years 1990-91 to 1998-99, the question which arises for
D determination is: whether the concept of "balancing charge" in
Section 41 (2) could be read into Section 41 (1) of the Income
Tax Act, 1961?
3. In t~is batch of civil appeals the lead matter is the case
of Nectar Beverages Pvt. Ltd. v. Dy. CIT ( Civil Appeal No.
E 5291/04) in which the facts are as follows.
4. In the Lead Matter, the asses see who is the
manufacturer of soft drinks, purchased bottles and crates, each
~
item of which costed less than Rs. 5,000/- and, therefore, was
entitled to and allowed 100% depreciation on the cost of the ..-,
F said bottles and crates, in the year in which they were acquired,
under the proviso to Section 32(1 )(ii) of the Income Tax Act,
1961 ("1961 Act" for short). When bottles and crates got worn
out, they were sold by the assessee and proceeds therefrom
were shown as "miscellaneous income" in the subsequent years.
G If these sales had taken place in the previous years relating to
~
the assessment years prior to 1988-89, the same would, without
doubt, would have been included in the business income of the ~
assessee under Section 41 (2). This was because prior to the
assessment year 1988-89, Section 41 (2) inter alia provided for
-H
-
NECTAR BEVERAGES PVT. LTD. v. DEPUTY 1179
COMMISSIONER OF INCOME TAX [S.H. KAPADIA, J.]

.....
" balancing charge which was chargeable as income taxable A
under the 1961 Act. However, with effect from assessment year
1988-89, Section 41 (2), which inter alia dealt with profit on sale
of depreciable as'set (balancing charge), stood deleted.
/Notwithstanding such deletion, the Department sought to tax Rs.
'· 50,850/- holding that the sale proceeds of the 100% B
depreciated and written off assets can still be treated as the
business income of the assessee under Section 41 (1) of the,
1961 Act.

5. Was the Department entitled to tax the aforestated.st1m
under Section 41 (1) is the question which we have to decide
c
in these civil appeals?

6. For that purpose, we quote hereinbelow Section
32(1)(ii), which reads as follows:
D
"Depreciation.

32.(1) In respect of depreciation of buildings, machinery,
plant or furniture owned by the assessee and used for the
purposes of the business or profession, the following
deductions shall, subject to the provisions of section 34, E
be allowed-
"" (i) [Omitted];
'"'-·

(ii) in the case of any block of assets, such percentage
F
on the written down value thereof as may be
prescribed:

Provided that where the actual cost of any machinery
or plant does not exceed five thousand rupees, the actual
--!-. cost thereof shall be allowed as a deduction in respect of G
_.. the previous year in which such machinery or plant is first
put to use by the assessee for the purposes of his business
or profession:"

- We also quote hereinbelow Section 41 (1 ), which reads as H
1180 SUPREME COURT REPORTS (2009] 9 S.C.R.

f
A follows:
,_,,.
"Profits chargeable to tax:.

41.(1) Where an allowance or deduction has been made
in the assessment for any year in respect of loss,
B expenditure or trading liability incurred by the assessee,
and subsequently during any previous year the assessee
has obtained, whether in cash or in any other manner
, I

whatsoever, any amoun-Fiii respect of-such loss or
expenditure or some benefit in_ respect:' of such trading
c liability by way of remission or cessation thereof, the
amount obtained by him or the value of benefit accruing
to him, shall be deemed to be profits and gains of
business or profession and accordingly chargeable to
income-tax as the income of that previous year, whether
D the business or profession in respect of which the
1
allowance or deduction has been made is in existence in
that year or not.

We also quote hereinbelow Section 41 (2) [Omitted by the
Taxation Laws (Amendment and Miscellaneous Provisions) Act,
E
1986, w.e.f. 1.4.1988], which reads as follows:

41.(2) Where any building, machinery, plant or furniture .
which is owned by the assessee and which was or has
been used for the purposes of business or profession is
F sold, discarded, demolished or destroyed and the moneys
payable in respect of such building, machinery, plant or
furniture, as the case may be, together with the amount of
scrap value if any, exceed the written down value, so much
of the excess as does not exceed the difference between
G thei actual cost and the written down value shall be
chargeable to income-tax as income of the business or
profession of the previous year in which the moneys
~

....
payable for the building, machinery, plant or furniture
became due:
".ff
NECTAR BEVERAGES PVT. LTD. v. DEPUTY , 1181
COMMISSIONER OF INCOME TAX [S.H. KAPADIA, J.]
\
Provided that where the building sold, discarded, A
demolished or destroyed is a building to w.1ich Explanation
5 to section 43 applies, and the moneys payable in
respect of such building, together with the amount of scrap
value, if any, exceed the actual cost as determined under
that Explanation, so much of the excess as does not B
exceed the difference betweer. the actual cost so
determined and the written down value shall be chargeable
to income-tax as income of the business or profession of
such previous year :

Provided further that where an asset representing
c
expenditure of a capital nature on scientific research within
the meaning of clause (c) of sub-section (2B) of section
35, read with clause (4) of section 43 owned by the
assessee which was or has been used for the purposes
of business after it ceased to be used for the purpose of D
scientific research related to the business is sold,
discarded, demolished or destroyed, the provisions of this
sub-section shall apply as if for the words "actual cost", at
the first place where they oqcur, the words "actual cost as
increased by twenty-five per cent thereof had been E
substituted.
~
Explanation: Where the moneys payable in respect of the
·-
<
building, machinery, plant or furniture referred to in this sub-
section become due in a previous year in which the F
business or profession for the purpose of which the
building, machinery, plant or furniture was being used is
no longer in existence, the provisions of this sub-section
shall apply as if the business or profession is in existence
in that previous year."
_,, G
~-

• 7. According to the Department, depreciation stood
allowed in the earlier years when the said bottles and crates
were bought; that such depreciation constituted "expenditure"
under Section 41(1) and, therefore, when the assessee sold
such bottles and crates as an as'set there was recoupment of H
''.l

1182 SUPREME COURT REPORTS [2009] 9 S.C.R. ·-
\
.~

f
A that expenditure which -recoupment was taxable as deemed
income under Section 41 (1). On the other hand, the case of the
assessee before us was that the word "expenditure" in Section
41(1) did not include depreciation. According to the assessee,
each bottle and crate constituted 100% depreciable asset and
8 since each bottle and crate costed less than Rs. 5,000/- the
actual cost stood allowed as 100% deduction in respect of the
previous year in which such plant was put to· use by the
assessee for its business. In short, the W.D.V. stood reduced
to nil in the year in which the item was put to use. According to
c the assessee, bottles and crates bought before 1.4.1995 were
sold in the previous year relevant to the assessment year in
question, however, on- account of deletion of Section 41 (2)
profits on sale of such bottles and crates were not taxable under
that sub-section.
D 8. In the light of the above arguments, we need to analyse -I
Section 41(1) and Section 41(2). Section 41 falls·- ur;ider
Chapter IV which deals with computation of business income.
Section 41 has a Head Note which says "Profits chargea~
to tax". Section 41(1) has remained unchanged, both, befor
E '1.4.1988 and even after 1.4.1998. As stated above, Section ·-,
41 (2), however, stood deleted. between assessment years
1988-89 and 1998-99 for about ten years. Under Section 41(1), -,.
where any allowance or deduction has been made in the
Ir
'
_,,
assessment for any year in respect of loss, expenditure or
F trading liability incurred by the assessee, ·and subsequently
during any previous year the assessee had obtained, such loss
or expenditure in respect of such trading liability by way of
remission or cessation thereof, the amount obtained by him,
shall be deemed to be income of th~t previous year in which
G the recoupment takes place. According to the Department, .t-
notwithstanding, the deletion of Section 41 (2), since the
assessee had obtained the benefit of depreciation in the earlier
years as allowance or deduction in respect of expenditure
inqurred by it when it bought bottles and crates, on recoupment
H in the assessment years in question, such recoupment was
NECTAR BEVERAGES PVT. LTD. v. DEPUTY 1183
COMMISSIONER OF INCOME TAX [S.H. KAPADIA, J.]
\
liable to be taxed as deemed income under Section 41(1). We A
do not find merit in the. argument of the Deparlment. Prior to
1.4.1988, Section 41(1) and Section 41(2), both, existed on the
statute book. Section 41 (2) specifically brought to tax the
balancing charge as a deemed income under the 1961 Act. It
stated that where any plant owned by the assessee and used B
for business purposes was sold, discarded or destroyed and
the moneys payable .in respect of such plant exceeded the
written down value, then, so much of the surplus which did not
exceed the difference between the actual and the written down
value was made chargeable to tax as business income of the c
previous year in which moneys payable for the plant became
due. In other words, .as stated above, Section 41 (2) made the
balancing charge taxable as business income. In our view, if
the argument of the Department herein of reading the balancing
charge under Section 41(2) into Section 41(1) was to be
0
accepted then it_was not necessary for Parliament to enact
Section 41(2) in the first instance. In that event, Section 41(1)
alone wou1d have sufficed. In our view, Section 41(1}, Section
41(2), Section 41(3) and Section 41(4) operated in different
spheres. One more aspect needs to be highlighted. Each of
the sub-sections to Section 41 deal with different and distinct E
circumstances. For example, Sestion 41 (1) deals with
recoupment of trading liability. Section 41 (2) dealt with the
balancing charge. Section 41 (3) specifically deals with
balancing charge in respect of assets relating to scientific
research whereas Section 41(4) deals with recovery of bad F
debts earlier allowed. Therefore, each of the sub-sections deal
with different and distinct topics and one cannot read
recoupment under one sub-section into another.

9. The entire controversy, therefore, stands resolved if one G
understands the meaning of "balancing charge". Where any
allowance or deduction had earlier been made in respect· of
any loss, expenditure or trading liability and subsequently the
assessee has obtained or reallz~d any amount towards such
loss, expenditure or trading liability, Section 41 (1) deems such H
1184 SUPREME COURT REPORTS [2009] 9 S.C.R.

I
A realization/recoupment ·FIS assessee's income for the year in
which it is realized. SeCtion 41 (2) as it stood at the material
time stated that if in resp~ct of any plant and machinery, any
depreciation had been allowed and subsequently such plant
and machinery was sold, discarded or destroyed, the assessee
1
B might get some value either ps a result of sale or insurance or
from salvage or compensation thereabout. The necessity to
keep Section 41(2) as a provjsion in addition to Section 41(1)
arose from the fact that, in Its very nature, depreciation is
neither a loss, nor an expef\lditure, nor a trading liability,
c referred to in Section 41(1). The depreciation recovered on
sale,of th~ capital asset was i~cludible in the total income as
balancing charge only under S~ction 41 (2). That concept was
foreign to the scheme of Sectiqn 41 (1 ). The balancing charge
under Section 41 (2) arose only where any depreciable .asset
(build_ing, machinery, plant or furniture) was sold. In fact, when-
0
the concept of "block of assets" stood introduced w.e.f.
1.4.1988, Section 41(2) stood ,deleted. However, even after
1.4.1988, the proviso to Section 32( 1)(ii) continued till 1.4.1996 ,
when by the Finance (No. 2) Act, 1995 the bottles and crates
even below Rs. 5,000/- came within the "block of assets" as
E defined under Section 2(11) of: the 1961 Act. As stated, this
judgment is confined to depreqiable assets costing less than
Rs. 5,000/- which did not enteri the block of assets during the
assessment years in questior:i (when Section 41 (2) stood
deleted).
F
Effect of introducing Finance (No. 2) Act. 1995 w.e.f.
1.4.1996:

10. At the outset, it may, be noted that, by the above
G Finance Act, the first proviso to.Section 32(1)(ii) stood deleted
_w.e.f. 1.4.1996. Consequently, bottles, crates and cylinders
whose individual cost did not exceed Rs. 5,000/- also came to
be included in the block of assets.

11. Before us, in this batch of civil appeals, we have four
H Civil Appeals (Civil Appeals arising .out of S.L.P. (C) Nos. 8002/
NECTAR BEVERAGES PVT. LTD. v. DEPUTY 1185
COMMISSIONER OF INCOME TAX [S.H. KAPADIA, J.]
\
09 and 3064/09, Civil Appeal Nos. 356-357/06 and 5858/06) A
which fall in the period after 1.4.1996. The Lead Matter in this
category is M/s Goa Bottling Company Pvt. Ltd. v. Asst!.
Commissioner of Income Tax (Civil Appeal Nos. 356-357/06
). That lead matter is for assessment year 1998-99. Mis Goa
Bottling Company Pvt. Lid. is a company registered under the B
Companies Act, 1956 and is in the business of manufacture
and sale' bf soft drinks. For the purposes of its business, it
bought bottles and crates whose cost per unit did not exceed
Rs. 5,000/-. During the year ending 31.3.1998, the company
received a sum of Rs. 6,89,91,901 on sale of scrap bottles and c
crates. The sale proceeps were segregated in two parts:

(a) in respect of bottles and crates purchased prior to
31.3.1995; and

(b) those purchased after 1.4.1995. D
In the Return of income filed, the sale proceeds relating to
bottles and crates purchased after 1.4.1995 were taken into
consideration for the purpose of computation of short term
capital gains under Section 50 whereas the sale proceeds E
relating to bottles and crates purchased prior to 31.3.1995was
not offered for short term capital gains on the ground that the
assets stood depreciated at 100% under the proviso to Section
32(1 )(ii) and hence did not form part of the block of assets.

12. For reasons given hereinabove, we are of the view that F
bottles and crates purchased prior to 31.3.1995 did not form
part of the block of assets, hence, profits on sale of such assets
were not taxable as a balancing charge, neither under Section
41 ( 1) nor un~er Section 50. In respect of bottles and crates
purchased after 1.4.1995, on account of deletion of proviso to G
' Section 31{1)(ii) (vide Finance Act, 1995) such bottles and
crates formed part of block of assets and consequently such
assets purchased after_ 1.4.1995, in this case, became exigible
to capital gains tax under Section 50.
H
1186 SUPREME COURT REPORTS [2009] 9 S.C.R.

l
A 13. Before concluding, it may be pointed out that, in the
case of Nectar Beverages Pvt. Ltd., assessee has earmarked
the sale proceeds from bottles and crates as "miscellaneous
income" and not as "profit on sale of assets" whereas, in the ·
case of other assessees, including Industrial Oxygen Co. Ltd.
B (now known as lnox Air Products Ltd), the said sale proceeds
have been earmarked specificallY-llnder the Heading "Profits
from sal~ of assets". To this limited extent only, we remit the
case(s) of Nectar Beverages Pvt. Ltd. [Civil Appeal Nos. 5291/
. ,04, 5293/04 and 359-360/06] to the A.O. to go through the
c . computation submitted by Nectar Beverages Pvt. Lid. and find
out whether earmarking "profits from sale of assets" as
"miscellaneous income" has resulted in the understatement of
net profits at the pre-Section 28 stage and taxable profits at
post-Section 28 stage. In all other cases, sale proceeds have
been earmarked as "profits on sale of assets" and in those
0
cases, therefore, there is no question of verification by the AO .. ,
14. Subject to above, the Civil Appeals filed by the
· assessees succeed with no order as to costs.

N.J. Appeals disposed of.