https://www.taxtmi.com/caselaws?id=8026 Under the mercantile system, income is taxable only when it has actually accrued or arisen, which requires a present legal right to recover the amount and a corresponding legal obligation on the debtor. Mere issue of bills at a higher rate after expiry of an agreement did not create an enforceable entitlement. On the facts, the assessee proved no legal right to recover anything beyond the amount actually received at 19 paise per unit, and the balance remained a disputed demand. The Bombay HC therefore held that the claimed amount was not includible in the assessee's income for the relevant accounting year. en-us Sat, 11 Apr 1970 00:00:00 +0530 Fri, 27 Mar 2009 11:49:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8026 Under the mercantile system, income is taxable only when it has actually accrued or arisen, which requires a present legal right to recover the amount and a corresponding legal obligation on the debtor. Mere issue of bills at a higher rate after expiry of an agreement did not create an enforceable entitlement. On the facts, the assessee proved no legal right to recover anything beyond the amount actually received at 19 paise per unit, and the balance remained a disputed demand. The Bombay HC therefore held that the claimed amount was not includible in the assessee's income for the relevant accounting year. Case-Laws Income Tax Sat, 11 Apr 1970 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8026