Accrual of salary depends on an enforceable right to payment; a reversed book provision does not create taxable income.

Remuneration credited in a company's books does not become taxable salary under section 15(a) unless the managing director had an enforceable right to receive it and the amount had actually accrued as a debt due. Where the board, because of continuous losses, validly resolved not to pay the remuneration and to write back the provision, the accounting entry alone could not create a taxable right in the assessee's favour. The alleged salary was therefore not "due" from the employer and did not constitute income in the assessee's hands.

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Issues: Whether remuneration credited in the company's accounts as payable to its managing director, but not paid and later resolved not to be paid, constituted income of the assessee under section 15(a) of the Income-tax Act, 1961.

Analysis: The assessee's entitlement to remuneration depended not merely on an accounting provision or the terms of appointment, but on whether the amount had actually accrued as a debt due to him. The board of directors resolved, because of the company's continuous losses, that no remuneration was to be paid and that the provision should be written back. In that situation, the entry in the books could not by itself create a taxable right in favour of the assessee, and the salary could not be treated as due from the employer for purposes of section 15(a).

Conclusion: The amounts claimed as remuneration were not income of the assessee and were not taxable in his hands.

Final Conclusion: The references were answered in favour of the assessee, holding that the alleged remuneration did not constitute taxable income for the years in question.

Ratio Decidendi: Salary becomes taxable only when a enforceable right to receive it has accrued; a mere provision in accounts, especially when reversed by a valid board resolution not to pay, does not create taxable income.

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