Fiduciary receipts are not trading income when received as agent, even if later unclaimed or transferred to profit and loss.

Amounts received by an assessee as agent for collieries and consignees, by way of under-charges, were held not to be trading receipts because they were received in a fiduciary and representative capacity, not in the assessee's own right as profit. The character of the receipt depended on the capacity in which it was obtained, and money held for others did not become taxable income merely because it remained unclaimed or was later transferred to the profit and loss account. The unclaimed surplus and the transferred amounts were therefore not assessable as the assessee's income.

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Issues: Whether amounts received by an assessee, acting as agent for collieries and consignees, by way of under-charges constituted its trading receipts and were taxable as income, including the surplus remaining unclaimed and the amounts later transferred to the profit and loss account.

Analysis: The amounts were found to have been received by the assessee as an agent and in a fiduciary capacity vis-a -vis the consignees. The character of the receipt depended on the nature in which it was received, and on the facts the money was not received by the assessee in its own right as trading profit. The case was treated as analogous to authorities holding that money received for another in a fiduciary or representative capacity does not become trading receipt merely because it remains unclaimed or is later mixed with the recipient's own funds.

Conclusion: The amounts received by way of under-charges did not constitute trading receipts of the assessee, and neither the unclaimed surplus nor the amounts transferred to the profit and loss account were assessable as its income.

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