M/S.Sundaram Fin.Ltd vs Asst.Commissioner Of Income ...

The Supreme Court held that the amount of Rs. 36,47,585/- collected by the assessee as contingent deposit is taxable as income under Section 28 of the Income Tax Act, 1961. The Court emphasized that the true legal character of the transaction must be determined, and since the amount formed part of the business turnover and was not kept in a separate interest-bearing account, it constituted income. The Court distinguished this case from CIT v. Bazpur Co-operative Sugar Factory Ltd., asserting that the principle of mutuality does not apply here.