Real accrual governs taxability of disputed collections; amounts held under court directions are not taxable income absent enforceable rights.

Disputed excess rent collected by a cold storage assessee and deposited with the District Magistrate under High Court directions did not constitute taxable income for the relevant year because the amount had not really accrued to the assessee. The decisive test was real accrual or receipt, not a mere credit entry in the books. Since the assessee had no enforceable right to retain the disputed amount and no effective control after deposit, it was treated as a sum held under judicial control rather than real income. Authorities relying on accounting treatment and unrelated trading-receipt cases were distinguished.

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Issues: Whether the excess rent collected by the assessee and deposited with the District Magistrate pursuant to the High Court's interim directions constituted taxable income of the assessee for the relevant year.

Analysis: The assessee carried on cold storage business under the U.P. Regulation of Cold Storage Act, 1976 and, because of the pending dispute and the High Court's directions, collected the disputed difference in charges and deposited it with the District Magistrate. The decisive test was whether the amount had really accrued to the assessee or whether it merely passed through the assessee under judicial control. Mere credit entry in the books did not determine taxability. On the facts, the assessee had no enforceable right over the disputed amount, no effective control over it after deposit, and the amount had not resulted in real income during the year. The authorities' reliance on the assessee's accounting treatment and on cases dealing with other kinds of trading receipts was distinguishable.

Conclusion: The disputed excess collection did not accrue as income to the assessee and was not taxable in the relevant year.

Ratio Decidendi: Income is taxable only on real accrual or receipt, and a mere book entry or temporary collection under court directions does not create taxable income where the assessee has no enforceable right to retain the amount.

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