( 1 ) THIS is a reference under Section 66 (1) of the Income-tax Act, 1922, and the point for our consideration is whether sales tax charged by an auctioneer forms part of his trading receipts and is as such liable to be assessed to income-tax.

( 2 ) THE assessee is a private limited company, dealing in furniture and also acting as auctioneers. For the assessment year 1960-61, for which the corresponding accounting year was the financial year ending 31st March, 1960, the Income-tax Officer found that the assessee had collected a sum of Rs. 32,986 from the purchasers in the auctions held by it over and above the amount of Rs. 50,187 which it had earned as commission. He found that the aseessee had made out one cash memo. in respect of each sale, including therein the price of the articles and also the amount of sales tax payable thereon. In his opinion that amount of Rs. 32,986 was in reality a portion of the sale price itself, because sales tax was not legally due from the purchasers of the goods but was the liability of the sellers only. As the amounts realised as sales tax had not been paid to the owners of the goods, the amounts formed part of the income of the assesse