TMI Blog1973 (11) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in the business of manufacture and sale of bidis. During the previous year ending on October 24, 1965, relevant to the assessment year 1966-67, the assessee charged from its customers certain amount, which was credited to a separate account called dharamshala account. The charge was at the rate of certain percentage of the sale price of bidis and was separately shown in the sale vouchers issued to the customers. The total collection during the year amounted to Rs. 11,159. The Income-tax Officer called upon the assessee to show as to why the amount in question be not treated as its income. The assessee in a written reply stated that the amount in question represented the collections made for the construction of a dharamshala and, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price. The customers from whom the collection was made had no control over its disposal nor was there any legal obligation upon the assessee to spend it in a particular way. From the customers' point of view it was a part of the sale price of bidis. The view of the Tribunal that the money belonged to the customers is not correct. It was the assessee's money and was a part of the sale price of bidis and, as such, would go into the computation of the income arising from business. The fact that the assessee set it apart for the construction of the dharamshala, which may be said to be a charitable purpose, does not in any way alter the position. The decisive factor in such cases is not the particular use to which a receipt is put but the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above that there was no trust in existence under which the assessee was obliged to hold the money so collected on trust for the purpose of spending it on the construction of the dharamshala. It was merely his intention to do so, but there was no legal obligation upon him. Another set of cases, which would illustrate the point, deal with the collection of sales tax by dealers. Sales tax is a liability imposed upon a dealer in respect of his transactions of sale. If a dealer collects sales tax from a customer, whether he is authorised to do so or not under the Act, the tax so collected is a part of sale price and goes into the computation of his business profits. Of course, any tax paid to the Government has to be allowed to him as a ded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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