Receipt into a creditor's bank account counts as income-tax receipt, even if the amount is placed in suspense and disputed.

Money credited by a lessee into the assessee's bank account as royalty was treated as receipt by the assessee for income-tax purposes, even though it was entered in a suspense account and the quantum was disputed. The court reasoned that the amount had been paid pursuant to the existing arrangement, came under the assessee's control, and was mixed with other credited sums; the bank was not the true recipient in the legal sense relevant to assessment. The pending dispute with the lessee about whether additional royalty was payable did not affect the taxability of the amount already received. The sum was therefore assessable as income.

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Issues: Whether the sum of Rs. 88,756 credited to the assessee's bank account as royalty and kept in a suspense account was assessable to income-tax in the assessment year 1938-39 under the Indian Income-tax Act, 1922.

Analysis: The amount was paid by the lessee to the assessee's bank account pursuant to the existing arrangement, was mixed with the assessee's other credited sums, and remained under his control. The circumstance that the assessee entered it in a suspense account or intended to dispute the quantum of royalty did not alter the fact that the money had been received by him as income. The dispute with the lessee concerned whether more royalty was payable and could not affect the taxability of the amount already received. A payment into the assessee's account constituted receipt by the assessee for income-tax purposes, and the banker was not the true recipient in the legal sense relevant to assessment.

Conclusion: The amount was assessable as the assessee's income, and the reference was answered in favour of the Revenue.

Ratio Decidendi: Money paid by a debtor into the creditor's bank account at the creditor's request is received by the creditor for income-tax purposes, and its entry in a suspense account does not prevent assessment where the amount is under the creditor's control and has been received as income.

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