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Interpretation of Income-tax Act - Toll tax collection - Corporation's income or State Government's income. Analysis: The judgment involved a common question of law regarding the nature of toll tax collection made by a Government company, referred to as the Corporation, during the assessment years 1977-78 and 1978-79. The Corporation collected tolls for bridges of the State Government under authorization. The Income-tax Officer treated the tolls as the Corporation's income, leading to an appeal by the Corporation to the Tribunal. The Tribunal analyzed various documents and concluded that the tolls collected were the income of the State Government, with only 15% being the Corporation's income for managing toll collection. The Tribunal considered reports indicating that toll taxes were collected by the Corporation on behalf of the Bihar Government and that the Corporation was an agent entrusted with bridge construction and toll collection. The Tribunal also noted a notification transferring bridge toll collection to the Corporation. The Tribunal's decision was based on a thorough examination of statutory provisions, communications, and accounting practices. The High Court analyzed the legal principles governing the determination of income nature, emphasizing that the actual character of a transaction prevails over the parties' labels. Referring to relevant case law, the Court highlighted that the substance of a transaction, not its name, is crucial. The Court examined the Indian Tolls Act, which authorizes the State Government to levy tolls and place collection under designated management. Therefore, the Corporation, acting as an agent under this Act, could not claim toll collection as its income. Further, the Court discussed constitutional provisions stating that revenues received by the State Government form part of the Consolidated Fund of the State. This legal framework prevented the Corporation from claiming ownership over toll collections. The Court rejected the notion of overriding title, asserting that any presumption of the Corporation's ownership was legally impermissible. Conclusively, the Court upheld the Tribunal's decision, ruling that toll collections were the State Government's income, not the Corporation's. The judgment favored the Corporation, answering the referred question in its favor. No costs were awarded in this case. The Chief Justice concurred with the judgment, affirming the decision. This detailed analysis of the judgment provides a comprehensive understanding of the legal issues, interpretations of relevant laws, and the reasoning behind the Court's decision.
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