TRUCK OPERATORS UNION Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The following question has been referred to this Court under Section 66(1) of the Indian Income-tax Act, 1922 (Act No. XI of 1922) (hereinafter referred to as "the Act of 1922"), and Section 256(1) of the Income-tax Act, 19M(Act No. XLIII of 1961) (hereinafter referred to as "the Act ofl961") :-

(2.) The assessee in this case is Truck Operators Union in the status of association of persons. The relavant assessment years, are 1961-62 and 1962-63, for which the accounting years were the calendar years 1960 and 1961 respectively. The assessee derived income from commission on booking of trucks and in that connection provided facilities to the truck operators opeating in the Subzi Mandi Market, Delhi. According to the statement of the case, the modus operandi of the assessee Union was to charge commission at the rate of 5% on the gross booking of the truck operators, who were members of the Union, operating in the Subzi Mandi area. After keeping a percentage of 2 the assessee used to return the balance to "such members". During the assessment years under consideration the assessee under the terms of agreement paid a sum of Rs. 8,160.00 as allowance to its constituent members. Question arose for determination whether the pay- mem of Rs. 8,160.00 was a permissible deduction for the purpose of the income-tax. The income-tax Officer decided this question against the assessee. On appeal the Appellate Assistant Commissioner decided the question in favour of the assessee. On further appeal the Tribunal held that the above payment was in the nature of capital expenditure. The question reproduced above was thereafter on the application of the assessee referred to this Court.

(3.) When the case came up for hearing before us on May 27, 1970, the learned counsels for the parties pointed out that the statement of the case was vague in respect of a material fact and the case should be remitted back to the Tribunal for clarification. We agreed with the learned counsels and in this connection we referred to the following passage in the statement of the case :