1969 (10) TMI 7

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....that belief, the assessee-firm collected sales tax from its constituents on forward contracts, and subsequently deposited the amount so collected into the Treasury. Subsequently, there was a decision of the High Court to the effect that no sales tax was leviable on forward contracts. The State Government, therefore, refunded an amount of Rs. 13,272.37 on account of sales tax unnecessarily deposited by the assessee-firm. When the Income-tax Officer took up the assessment for the year 1960-61, he examined the relevant account in the books of the assessee-firm. It was found that the opening balance in this account was Rs. 3,799.91. The amount received by refund was Rs. 13,272.37. The total amount indicated on the credit side was Rs. 17,072.28.....

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....he assessee has received, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or has obtained some benefit in respect of such trading liability by way of remission or cessation thereof, the amount received by him or the value of the benefit accruing to him shall be deemed to be profits and gains of business, profession or vocation and to have accrued or arisen during that previous year." Mr. K. M. Dayal, appearing for the assessee, raised two contentions before us. Firstly, he pointed out that the refund made by the State Government is on account of sales tax deposited by the assessee previously. Sales tax was never the income of the assessee. It was merely an amount collected by the assesse....