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PETITIONER: THE COMMISSIONER OF INCOME-TAX,MADHYA PRADESH AND BHOPAL
Vs.
RESPONDENT: MESSRS. VYAS & DOTIWALA
DATE OF JUDGMENT: 03/10/1958
BENCH: SARKAR, A.K. BENCH: SARKAR, A.K. AIYYAR, T.L. VENKATARAMA GAJENDRAGADKAR, P.B.
CITATION: 1959 AIR 90 1959 SCR Supl. (1) 39 CITATOR INFO : R 1961 SC1261 (7)
ACT: Income-tax-Assessees financing cloth distribution scheme- Profits, if accrue to assessees-Agreement to utilise Profits for charitable Purposes-Such Profits, if exempt from taxation-lndian Income-tax Act, 1922 (XI Of 1922), s. 4(3) (i-a).
HEADNOTE: The Deputy Commissioner of Amraoti, evolved a scheme for the distribution of standard cloth. The assessees agreed to finance the scheme without charging any interest and were appointed financiers and distributors. The orders for the cloth were placed by the Government with the mills and the cloth was delivered to the assessees upon their paying the value of the cloth together with 6-1/4% of the ex-mill price. The Deputy Commissioner paid 4-1/2% of the ex-mill price to the asses-sees for contingent expenses of working the scheme. The assessees distributed the cloth at prices fixed by the Deputy Commissioner through the Tehsildars and the Deputy Commissioner was responsible to the assessees for the sale proceeds receivable from the Tehsildars. Out of the ...