SINCLAIRE MURRAY & CO. (P) LTD. vs COMMISSIONER OF INCOME TAX, CALCUTTA

The Supreme Court held that sales tax collected by the assessee from purchasers, which was not deposited with the State Government, constitutes a trading receipt under the Indian Income Tax Act, 1922. The Court emphasized that the true nature of the receipt, rather than its accounting classification, determines its taxability. The appeal was dismissed, affirming that the amount collected as sales tax should be treated as part of the income of the assessee, as it was utilized for business profit, following the precedent set in Chowringhee Sales Bureau P. Ltd. v. Commissioner of Income-tax West Bengal.