Accrual of rent on contractual due date confirmed, so assessment for the relevant year remains valid.

Rent under a lease payable "on or before" 30th June accrues on the contractual due date, because the clause grants the lessee an option to pay earlier but vests the lessor with a right to demand payment on 30th June; accordingly, for accounting under the Madras Agricultural Income-tax Act the accrual occurs on 30th June of the lease year. Where that accrual falls within the accounting year relevant to assessment year 1962-63, the assessment is not vitiated by prior tax treatment of the same sums in an earlier year; corrections to earlier assessments, not annulment of the later assessment, are the appropriate remedy.

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Issues: Whether the rents under a lease payable "on or before 30th June" accrue before the accounting year ending 31st March for the purposes of assessment under the Madras Agricultural Income-tax Act, and whether the assessment for the year 1962-63 is vitiated on that ground.

Analysis: The lease clause providing that rent shall be payable "on or before the 30th day of June of each year" gives the lessee the option to pay earlier but establishes the lessor's right to demand payment on 30th June; accordingly, on an accrual basis the rent for a lease year accrues on 30th June of that lease year and not earlier. Even accepting that accrual occurs on 30th June, there is an accrual on 30th June, 1961 which falls within the accounting year relevant to assessment year 1962-63. An earlier assessment which may have taxed the same accrual in a prior year does not render the assessment for 1962-63 void where accruals fall within the relevant accounting period; the proper remedy is correction of earlier assessments if statutory remedies permit, not cancellation of the 1962-63 assessment.

Conclusion: The lease rent accrues on 30th June of each lease year and the assessment for 1962-63 is not to be set aside on the ground that the assessing officer treated the rent as having accrued before 31st March, 1962; the tax revision is dismissed.

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