Accrual of income on enhanced sugar price kept in suspense account was denied for the relevant assessment year.

Extra price realised on sugar sales, where the difference between the Government-fixed price and the higher claimed price had to be deposited in a suspense account under court directions, was held not to accrue as income in the relevant assessment year. The court followed its earlier ruling on identical facts and treated the enhanced-price amount as outside taxable income for that year because the assessee's right to retain it was subject to the judicial condition. The issue was decided in favour of the assessee and against the Revenue.

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Issues: Whether the extra amount realised on the enhanced price of sugar and kept in a suspense account pursuant to court directions accrued as income in the relevant assessment year and formed part of the assessee's taxable income.

Analysis: The amount was collected subject to a judicial condition requiring the difference between the Government-fixed price and the higher price claimed to be deposited in a suspense account. On identical facts, the same court had already held that such an amount did not accrue as income in the relevant year. Following that decision, the court treated the enhanced-price amount as not having accrued for the assessment year in question.

Conclusion: The issue was answered in favour of the assessee and against the Revenue.

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