Commissioner of Income Tax vs Sagarmal Ramautar Lal

This is a reference u/s 256(1) of the I.T. Act, 1961, made by the Income Tax Appellate Tribunal, Patna Bench "A", Patna. Statement of the case has been duly submitted and the following question of law has been referred to this court for opinion :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 15,295 standing as balance in Goshala and Dharmada accounts in the balance-sheet relevant to the assessment year 1969-70 ?"

It is not necessary for us, in view of the settled nature of the law by now, to go into any detailed statement of facts. The Supreme Court has already settled this question in the case of Commissioner of Income Tax (Central), New Delhi Vs. Bijli Cotton Mills (P.) Ltd., . It has been laid down there, inter alia, that the "Dharmada" amounts could not be regarded as part of the price or a surcharge on the price of goods purchased by the customers : the amount of "Dharmada" was undoubtedly a payment which a customer was required to pay in addition to the price of the goods which he purchased from the respondent, but the purchase of the goods by the customer would be an occasion and not the consideration for the "Dharmada" amount taken from the customer.

We, accordingly, answer the question referred to us against the Revenue and in favour of the assessee and hold that, on tho facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 15,295 standing as balance in Goshala and Dharmada accounts in the. balance-sheet relevant to the assessment year 1969-70.

In the circumstances of the case, however, there shall be no order as to costs.