Confusing Bailment and Pledge since 3 months now...
tax ts_lawcet beginner judgment_takeMehul Corporations Ltd v State of Gujarat [2003] 254 ITR 310
I'm not sure if this judgment makes me go "hmm" or "wtf"! In 2003, the Gujarat High Court dealt with a case where the company was charged tax on a sum of money held under a trust for the benefit of its employees. The court ruled that the company was liable to pay tax on the interest earned on these funds because they were in its custody and control.
I'm not sure I agree with this judgment. If a company sets aside money for its employees, shouldn't it be treated as a trust and exempt from tax? Is it really the company's money when it's just a custodian? But, I guess that's the law for ya...
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Bhai, don't worry, it's common to get confused between Bailment and Pledge. Think of it like this: Bailment is when you give something to someone else to hold for you (e.g. a bike to a mechanic), but you still own it. Pledge, on the other hand, is when you give something to someone as collateral for a loan, but you still own it. So, the key is ownership - in bailment you keep ownership, in pledge you temporarily give it up. Now, got it bhai?