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TMI Blog1990 (12) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... not the assessee's income ?" These two tax cases relate to the assessment years 1977-78 and 1978-79. Since a common question of law arising out of identical facts is involved in both the cases, these cases are being disposed of by a common judgment. The assessee, Bihar Rajya Pul Nirman Nigam Ltd. (hereinafter to be referred to as the "Corporation"), is a "Government company" within the meaning of section 617 of the Companies Act, 1956. It was incorporated on June 11, 1975. Its shares are held by the Government of Bihar through its officers. During the said two assessment years, the Corporation had collected Rs. 34,48,235 and Rs. 41,89,718 as tolls, respectively, in respect of the bridges of the State Government. It is the common ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming to the aforesaid conclusion, the Tribunal took into account the reports of the directors of the Corporation dated September 22, 1976, pertaining to the first accounting year ending on March 31, 1976. This report clearly contains that "toll taxes were being collected by the Corporation on behalf of the Bihar Government. The Corporation had been entrusted with the work of constructing bridges, approach roads and other types of civil works and for collection of tolls on bridges as an agent of the said Public Works Department." Paragraph No. 3 of the said report further contained that the manner in which the toll as collected by the Corporation was to be accounted for, was under the consideration of the Government and that pending finali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and brought it to levy of tax. According to him, it amounts to an overriding title of the Corporation over the collection of tolls since the State Government by its unequivocal declaration had diverted its income of toll in favour of the Corporation at the very source. On the other hand, Mr. K. N. Jain, learned counsel appearing for the assessee-Corporation, has submitted that looking at the relevant statutory provisions and the attending facts and circumstances, the tolls collected by the Corporation as per the authorisation of the Government, cannot be treated as the income of the Corporation since, while managing the collection of tolls, the Corporation had acted merely as an agent of the State Government. At the very outset, I ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay camouflage the real nature of the transaction by using clever phraseology. In some cases, the so called premium is in fact advance rent and in others rent is a deferred price. It is not the form but the substance of the transaction that matters. The nomenclature used may not be decisive or conclusive but it helps the court, having regard to the other circumstances, to ascertain the intention of the parties." In the above background, it has to be examined and ascertained as to whether the tolls collected by the Corporation can at all be treated as the income of the Corporation for the purpose of the Income-tax Act. It is not in dispute that the bridges in respect of which the State Government had authorised the Corporation to collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven the slightest doubt that, in the present case, while managing the collection of tolls, the Corporation had merely acted as an agent of the State Government. It is needless to say that this statutory provision will have an overriding effect on the covenants and communications contained in intentions contrary to the statutory provision. A person authorised to manage the collection of tolls cannot have status other than that of an agent of the State Government which is further amplified by the last part of section 2 of the Tolls Act where it has been said that: " all persons employed in the management and collection of such tolls shall be liable to the same responsibilities as would belong to them if employed in the collection of the lan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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