In Brief
A stock broker received money from a bank to purchase securities and take demand drafts payable to public sector undertakings (PSUs) that had made fixed deposits with the bank. The tax authority assessed this amount as the broker's income. The Supreme Court held that the broker acted as an agent for the bank under a prior understanding, holding the money in trust to pay the PSUs, not as his own income. Evidence from related criminal proceedings showing the principal-agent relationship, though not binding on tax authorities, could properly be considered. The Court dismissed the revenue's appeal, affirming that no taxable income accrued to the broker.
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