TMI Blog1978 (4) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... sentially as follows: (a) The assessee acts as the middleman and/or agent in respect of sale of coal by the collieries to the consumers. (b) Following the sales, the colliery loads the coal into wagons and consigns the same to the consumer on the basis "freight to pay " which means that the freight is to be paid by the consumer. (c) The railways charge freight on "chargeable weight", arrived at in the following manner:-The wagon is first weighed empty; then coal is loaded up to the permitted limit and the loaded wagon is weighed thereafter to ascertain " gross weight ". The difference between the weight of empty wagon and the gross weight of the loaded wagon represents the " net weight" of coal. The " chargeable weight " for the purposes of freight is, however, either the net weight of coal loaded or the carrying capacity of the wagon, whichever is higher. (d) After the coal is loaded, the colliery sends the consignment forwarding note to the consignee who collects the coal after paying the freight charges, a copy of the same is forwarded to the assessee. (e) The colliery also sends its bill for the coal to the assessee. (f) The assessee collects the payment of the bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the essential facts: (i) The assessee is the del credere agents of the collieries and is also the agent of the consumers. (ii) The assessee collects from the consignees of the coal only the sale price. The freight is paid neither to the collieries nor to the assessee; it is paid direct to the railways by the consignee. (iii) The assessee collects the under-loading charges from the colliery, independent and irrespective of any demand from the consignee. (iv) There are cases where the consignees demand the under-charges and the assessee passes on the amounts received by it but there are cases where it does not leave the assessee with a surplus in the under-charges account. (v) The assessee's practice of collecting under-charges is not only from collieries managed by Karamchand Thapar Bros. but extends to other collieries as well. (vi) The collieries have to pay these under-loading charges only out of the price of coal supplied by them as there is no way of their making any recoveries from the railways." After considering a number of decisions cited at the hearing, namely, Morley v. Tattersall [1938] 22 TC 51; [1939] 7 ITR 316 (CA), Jay's-The jewellers Ltd. v. IRC [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his context, he relied on the observation of the Tribunal that the money came into the assessee's hands because it carries on business as commission agents. Mr. Pal relied on and cited Prices Tailors Ltd. [1963] 1 All ER 231 (Ch D). The facts in that case were that the assessee carried on business as bespoke ready-to-wear tailors. When taking orders for made-to-measure garments the customers' measurements were recorded in an order form and the customers used to be asked to make deposits. The deposits, if paid, were recorded in the order forms from which slips were detached and given to the customers showing the price of the balance, viz., the difference between the price charged and the amount of the deposit. The question arose whether such unclaimed deposits could be taxed in the hands of the assessee. It was not disputed that at the time of payment the property in the money deposited was of the assessee though subject to certain contingencies. It was also not disputed that such deposits were received in the course of the assessee's business. On the aforesaid facts, it was held that the amounts being the property of the assessee from the moment of receipt were trading receipts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the date of the subsequent operation. It seems to me, with all respect to that argument, that it is based on a complete misapprehension of what is meant by a trading receipt in income-tax law. No case has been cited to us in which anything like that proposition appears. It seems to me that the quality and nature of a receipt for income-tax purposes is fixed once and for all when it is received." Dr. Pal next cited CIT v. Sandersons Morgans [1970] 75 ITR 433 (Cal). The facts here were that in the profit and loss account of the assessee, a firm of solicitors in Calcutta, a sum of Rs. 4,078 was credited in the relevant assessment year. This sum represented the aggregate of the unclaimed balances in a number of personal ledger accounts of the clients of the assessee who had advanced moneys to the assessee in connection with cases entrusted. The said personal ledger accounts were closed and the balance was transferred to the profit and loss account. The question arose whether the said balance formed part of the taxable income of the assessee. A Division Bench of this court held that the said sum of Rs. 4,078 was not a revenue receipt liable to income-tax. The relevant observations ..... X X X X Extracts X X X X X X X X Extracts X X X X
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