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Issues involved:
The judgment involves a reference u/s 66(2) of the Indian Income-tax Act, 1922 for the assessment year 1957-58. The dispute revolves around three items totaling Rs. 18,295: Claims and refund, Insurance payable, and Boboins Bills issued. Claims and refund (Rs. 11,366): The assessee, a clearing and forwarding agent, maintained a running account with customs authorities for duties paid on behalf of constituents. Excess duty refunds were credited to a "claim and refund account." Unclaimed balance of Rs. 11,366 was treated as income and transferred to profit and loss account. Insurance payable (Rs. 4,778): The assessee collected amounts from constituents for insurance premia but did not pay the full sum to the insurance company. A surplus of Rs. 4,778 was transferred to the profit and loss account. Boboins Bills issued (Rs. 2,151): The amount represented surplus from Boboins sale proceeds. The assessee claimed it as its own purchases and transferred the surplus to the profit and loss account. The Income-tax Officer treated these amounts as the assessee's income, which was upheld by the Tribunal. The question referred to the High Court was whether the Tribunal was correct in treating the Rs. 18,295 as the assessee's income for the assessment year 1957-58. The High Court held that the amounts realized by the assessee were for services rendered and remuneration due. Unclaimed amounts were treated as profit by the assessee and transferred to the profit and loss account. The court noted a similar case precedent where unclaimed amounts were rightly considered as the assessee's profits for the relevant assessment year. Therefore, the court found no error in the Income-tax Officer's decision. In conclusion, the High Court answered the question in the affirmative, in favor of the department, allowing them costs of Rs. 200. Separate Judgment: No separate judgment was delivered by the judges in this case.
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