Refundable excess chitty collections were not taxable income where the amounts remained credited to subscribers.

Surplus amounts arising on termination of chitties were treated as refundable excess collections standing to the credit of subscribers, not taxable income of the assessee for the relevant year. The Tribunal accepted that subscribers sometimes paid more than the instalments due and that such excess was recorded as a liability refundable on demand for three years. On the materials available, the Revenue failed to displace this factual finding or show that the receipt had the character of income in that year, so the surplus was held not taxable.

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Issues: Whether surplus amounts arising on termination of chitties constituted taxable income of the assessee for the relevant assessment year or were only refundable excess collections standing to the credit of subscribers.

Analysis: The Tribunal accepted the assessee's explanation that subscribers sometimes paid amounts in excess of the instalments due, and that such excess collections were treated as liabilities refundable on demand for a period of three years. On the materials available, the surplus was found to be amounts lying to the credit of the subscribers and not income of the assessee. The Revenue did not bring anything to displace this factual finding or to show that the receipt had the character of income in the relevant year.

Conclusion: The surplus amounts were not taxable income of the assessee for the relevant year, and the Revenue's reference petition failed.

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