Law:

Section:

Section 28(i) of the Income-tax Act, 1961 [Corresponding to section 10(1) of the Indian Income-tax Act, 1922] - Business income - Chargeable as - Assessment year 1955-56 - Assessee secured orders for supply of coal from permit holders and in turn placed orders with various collieries for supply of coal directly to permit holders - Price of coal included railway freight up to destination - Assessee preferred claims in respect of under charges with colleries for excess freight paid in respect of coal not supplied and realised same - Amount so realised were kept in credit balance and payments were made to permit holders - Whether amount so left after meeting claims of permit holders could be assessed as business income of assessee - Held, yes Section 256 of the Income-tax Act 1961 - High Court - Reference to - Whether findings of facts found by Tribunal in a particular year could not in any way affect findings made in another assessment year - Held, yes FACTS The assessee claimed that the amount representing unclaimed credit balance written off during the year should not be treated as revenue receipt out of the said unclaimed credit balance, contain amount represented under-charges in respect of the freight for the under-loaded wagons, which the customers of the assessee had to pay under the Railway Rules, in spite of the fact that the wagons in question were not loaded to their full capacity by the collieries. The assessee claimed those under-charges from the collieries. The same was passed on by the assessee to the customers who made claims in that behalf from the assessee. The ITO found that such under-charges were not credited to the account of the individual customers and held that the same represented the trading receipts of the assessee and were liable to tax. The AAC upheld the assessment. The Tribunal found that that in the previous assessment year the Tribunal had held the amount of unclaimed credit balance as the assessee's income from business. It further found that the assessee secured orders for the supply of coal from permit-holders, and after obtaining such orders, in its turn, placed orders with various collieries for the supply of coal directly…

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