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1964 (3) TMI 10 - SUPREME COURTWhether, on the facts and circumstances of the case, the collections by the assessee-company described in its accounts as 'empty bottles return security deposits' were income assessable under section 10 of the Income-tax Act ? Held that:- The charge now under consideration is a charge additional to that collected under the " buy-back scheme " and this we have earlier said. It has never been in dispute, either in the earlier case or now, that the charge under the " buy-back scheme " which was collected under Government's sanction constituted a taxable income. This court had never said, nor was it ever contended by the assessee, that a collection would not be taxable if it had been made with the sanction of the Government. The first point of distinction sought to be made by the High Court is, therefore, unfounded. It seems to us that the only reason why the rules required a wholesaler to return the bottles to the distiller was to authorise the imposition of a term of the sale upon the breach of which, the charges made for the bottles would cease to be refundable. all that the rule does is to authorise the making of a contract concerning the deposit on the terms mentioned in it the object apparently being to avoid any question as to its validity arising later. We may here point out that the trade in liquor is largely controlled by Government regulations. It must, therefore, be held that the deposit was actually taken under a contract; it was none the less so though the contract was authorised by the statutory rules. The third point of distinction on which the High Court relied was, therefore, also without foundation. Appeal allowed.
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