ISSUE:
Whether the funds that were credited to the "Consumers Benefit Reserve Account" by Poona Electric Supply Co. Ltd. should be treated as taxable income for income tax assessment.
Whether the deductions used to calculate profits are valid for tax purposes and can be distinguished from distributions made with the proceeds, as well as how the mercantile method of accounting affects the calculation of taxable income.
RULE:
The money a firm reserves for a specified statutory purpose, such as delivering refunds or rebates to clients as relevant legislation requires, should not be taxable income for income tax purposes. Instead, these reserved funds should be subtracted from the business's total income.