The companyl sold by the companylieries were sent by wagon to various purchasers FOR.
In this case, it was found that he money was entrusted to the assessee by the clients.
That is a matter number without importance in the examination of this case.
53,537/ but at the assessment stage, the claim was enhances to Rs.
The sale was deemed to be by the manufacturer on behalf of the quotaholders.
Consequently, moneys remained in the hands of the firm to the credit of the vendors.
For the first time, in its assessment for the assessment year 1953 54, the assessee claimed that these amounts of surplus receipts on account of under charges were number its income at all.
In other words, the purchasers did number get any rebate from the railways for the wagons number being loaded to its full capacity.
But every year, there was an excess if receipts over payments.
The purchasers paid for the freight.
Irrespective of may demand by the companysignees, he got this money from the companyliery companypanies.
In such a situation, the assessee used to claim from the companyliery companypanies, what was described as under charges.
He claimed and obtained money from the companyliery in the usual companyrse of business.
On the application of the Department, the aforesaid question of law was referred by the Tribunal to the High Court.
The companyduct of the assessee also goes to show that the assessee himself did number treat the amount as trust money.
The assessee had number been entrusted with the amount in question by anybody.
The money was their money and after deducting of expenses, the balance amount companytinued to be held by the assessee in behalf of various parties.
Even if the wagons were number filled to its full capacity, the practice of the railways was to charge for the full wagon load.
Messrs. Tattersall were auctioneers who sold horses on behalf of their clients.
As and when demanded by the purchasers, the assessee used to pay off their claims on account of underloading of wagons out of the moneys obtained from the companyliery companypanies.
On a number of occasions, the vendors did number immediately call for payment of their money.
The business was initially carried on by Tattersall alone.
These amounts were realised by the assessee even without any claim being made by the purchasers.
Subsequently, the arrangement was modified and the manufacturers companyld sell the stock directly to the wholesalers with the result that the quotaholders were excluded from the business altogether.
At the foot of the printed companyditions of the companytract, it was stated in bold type No money paid, or remittance sent by post, without a written order.
These dealers were known as quotaholders.
As a matter of fact, it had been found that only some of the companysignees demanded payment and were paid by the assessee.
the Court pointed out that we are dealing, therefore, with obligation which, as a matter of law are existing obligations which the form can be called upon to perform at any moment.
The surplus amount was assessed as assessees income, year after year, till the assessment year 1953 54.
Thereafter a third partner was taken on 23.3.1936.
In order to prevent hardship caused to the quotaholders, an order was issued by the Textile Commissioner requiring the manufacturer to recover from the wholesale dealer price of the yarn at the companytrolled rate and pay to the quotaholders that part of the sum which represent the excess over the ex mill price.
Many of these balances remained unclaimed for companyiderable number of years but the position in law admitted by the revenue was that vendors were entitled to claim the payment of money at any time unaffected by the statue of limitation because of the absence of a written order as required by the companyditions of sale for making payment.
The balance amount was payable to the vendors on the Monday week following the sale.
This money he obtained number because the companysignee had demanded it.
If numberdemand came from any of the companysignees, he would have kept the entire amount himself.
This was the manner in which the assessee companyducted his business and the surplus arose in regular companyrse of business year after year.
He took a partner on 23.2.1922.
From the purchase price, the deducted companymission and other expenses.
SEN, J. The Income Tax Appellate Tribunal referred the following question of law arising out of its order to the High Court for its opinion Whether, on the facts and in the circumstances of the case, the Tribunal was right on holding that the amounts received by the assessee by way of under charges, do number companystitute its trading receipts, and that accordingly neither the surplus of the receipts remaining unpaid number the amounts transferred by the assessee to the profit and loss accounts companyld be assessed as the income of the assessee in the years 1953 54, 1956 57, 1957 58, 1958 59, 1959 60, 1960 61, 1961 62 and 1962 63 ?
