Provisional price receipts pending final determination are not taxable income until the right to retain them becomes unconditional.

An interim excess amount received under a consent arrangement pending final determination of the levy sugar price was treated as provisional and refundable, not as a determinate sale price. Because the assessee had no vested, unconditional right to retain the excess during the year, the receipt did not accrue as income or constitute a trading receipt in that year. Taxability would arise only when the price dispute was finally settled and the amount became definitively receivable as price. On that basis, the excess levy-sugar receipt was excluded from total income for the relevant year.

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Issues: Whether the excess amount received by the assessee under a consent order, pending final determination of the levy sugar price, constituted taxable income or a trading receipt in the relevant year.

Analysis: The assessee received the disputed difference between the Government-fixed levy price and the higher amount permitted under the interim arrangement, subject to a bank guarantee, interest liability, and eventual refund depending upon the final outcome of the price dispute. The amount was not finally adjudicated as price by the court during the year. It was held that the receipt lacked the character of a determinate and unconditional sale price and was, in substance, only an interim or provisional amount held pending final determination. Since no vested right to retain the excess had accrued during the year, the amount could not be treated as income or trading receipt for that year. The timing of taxation would arise only when the price dispute was finally settled and the amount, if any, became definitively receivable as price.

Conclusion: The excess sum of Rs. 25,27,126 was not taxable as income of the assessee for the year under appeal and was excluded from total income.

Final Conclusion: The appeals succeeded because the disputed excess levy-sugar receipts were held to be provisional amounts pending final price determination and not taxable income for the year.

Ratio Decidendi: A receipt received merely as an interim, refundable amount pending final adjudication of price does not accrue as income or constitute a trading receipt until the right to retain it becomes vested and unconditional.

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