Court upholds deletion of disputed income for 1974-75 & 1975-76

The court affirmed the Tribunal's decisions to delete disputed amounts due to the assessee for the assessment years 1974-75 and 1975-76. It held that since the government did not accept the claims made by the assessee for specific works, those amounts could not be considered as accrued income. The court ruled in favor of the assessee, upholding the deletion of the disputed sums for both assessment years.

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Issues:
1. Whether the Appellate Tribunal was justified in deleting certain amounts due to the assessee for the assessment years 1974-75 and 1975-76Rs.

Analysis:
For the assessment year 1974-75, the assessee claimed a loss under the head "Business" and disclosed income under "Other sources." The dispute arose regarding the amounts due from the Government of Andhra Pradesh for specific works. The Appellate Assistant Commissioner accepted part of the contention and directed deletion of the amounts. The Tribunal upheld this decision, considering the amounts as claims not accrued to the assessee during the relevant year. The Revenue appealed, arguing that the amounts should be deemed accrued as per the mercantile system of accounting. However, the court held that since the claims were not accepted by the government, they did not accrue to the assessee.

In the assessment year 1975-76, similar disputes arose regarding amounts due from the Government for specific works. The Appellate Assistant Commissioner accepted part of the contention and enhanced the assessment based on an award. The Tribunal upheld this decision, stating that the disputed amounts did not accrue to the assessee during the relevant year. The court agreed with the Tribunal's reasoning, emphasizing that since the government did not agree with the claims, the amounts cannot be considered as accrued income.

The court analyzed each disputed amount in detail. For the sum of Rs. 1,16,921 related to work done after an award, the government disputed the claim, leading to the conclusion that it did not accrue to the assessee. Similarly, for the amount of Rs. 51,844 related to specific works, the government's disagreement with the claim prevented it from being considered as accrued income. The court affirmed the Tribunal's decision to delete these amounts from the total income for the respective assessment years.

In conclusion, the court affirmed the Tribunal's decisions regarding the deletion of disputed amounts, emphasizing that since the government did not accept the claims made by the assessee, those amounts cannot be deemed as accrued income. The court ruled in favor of the assessee, upholding the deletion of the disputed sums for both assessment years.

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