COMMR. OF INCOME TAX (CENTRAL),LUDHIANA vs M/S, AMRITSAR TRASPORT CO.PVT. LTD.

The Supreme Court addressed the interpretation of Section 256(2) of the Income Tax Act regarding the assessability of Rs.1,38,577 collected as 'DHARMADA' by a transport company. The Court held that the amount, although collected under the guise of charity, was assessable as a trading receipt since it was not utilized for charitable purposes as claimed by the assessee. Consequently, the High Court's dismissal of the Revenue's application was overturned, and the matter was remanded for further proceedings.