Seth, J. - (1.) The assessee-firm carries on business in Khand, Dane, etc., on its own account as well as on commission basis. The ITO while making assessment for the assessment year 1973-74, noticed that in the balance-sheet there was an account under the style, ' Amanat Kkata ' with a credit balance of Rs. 29,028. This amount was realised from the 'constituents by the assessee and represented Krishi Utpadam Mandi Tax payable under Krishi Utpadan Mandi Act. The assessee took the stand that the amount could not be taxed as it maintained the accounts under mercantile system and that it had to pay the balance either to Krishi Utpadan Mandi or the constituents from whom it was realised. The ITO brought this amount to tax. On appeal, the AAC took the view that the liability to pay Krishi Utpadan Mandi Tax had accrued in the assessee's case. He found that the assessee had received various' notices of demand from Krishi Utpadan Mandi Samiti, Agra. It clearly indicated that the liability had accrued and ascertained. The addition of Rs. 29,029 was consequently deleted. On appeal by the Department the Income-tax Appellate Tribunal took the view that the recovery of market fee cannot form part of the trading receipt of the commission agent and the commission agent simply held the market fee on behalf of the State Govt. as a trustee and the amounts recovered cannot be said to be the income of the assessee in any case and, therefore, it cannot be brought to tax.
(2.) At the instance of the Commissioner of Income-tax, Agra, the following question has been referred for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the sum of Rs. 29,028 was liable to tax as trading receipt of the assessee for the assessment year 1973-74 ?"
(3.) In order to judge the nature of the receipt we may refer to Krishi Utpadan Mandi Rules framed under the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (Act No. XXV of 1964). Rule 66 empowers the Market Committee to levy and collect fees on the specified agricultural produce bought and sold in the market yards. Rule 68 runs as follows : "68. Recovery of fees--section 17(iii).--(1) The marketfee on specified agricultural produce shall be payable as soon as such produce is sold in the Principal Market Yard or Sub-Market Yards in accordance with the terms and conditions specified in the bye-laws. (2) The market fee shall be realised from the seller in the following manner. (i) If the specified agricultural produce is sold through the commission agent or directly to the trader, the commission agent or the trader, as the case may be, shall charge market fee from the seller in sale voucher in Form No. VI and deposit the amount of market fee so realised with the Market Committee in accordance with the directions of the Committee issued in this behalf. (ii) If the specified agricultural produce is sold directly by the seller to the consumer, the market fee shall be realised by the servant of the Market Committee authorised by it in this behalf....";