TaxTMI 
TaxTMI 
2001 (12) TMI 206
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.... Consultancy Agreement, the assessee and the other Scientists, who worked on the Project had to be paid consultancy charges and the payment had to be routed through CCMB. During the year under consideration, the assessee was paid an amount of Rs.1,09,881 as consultancy received from M/s. Sun Pharmaceuticals Ltd., and the same was reflected in the Tax Deduction Form (Form No.16), issued by its employer under the relevant Income-tax Rules. This amount was paid in two instalments of Rs.47,936 and Rs.61,945. The assessee, however, admitted in his return of income only the first instalment of Rs.47,936 and did not admit the second instalment of Rs.61,945 on the ground that CCMB had not followed the prescribed procedure before making the payment of Rs.61,945 to him and so the amount did not accrue to him. It was explained that as per the prescribed procedure, the Team Leader of the Project would recommend the distribution of the fees received from the client and the CCMB had to display the pattern of distribution on the notice board and the participants in the Project would have the option of filing objections within 15 days. This procedure was not followed in respect of the amount of Rs....
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....ttern of distribution has to be amended accordingly. An amendment of the pattern of distribution would invariably imply the possibility of increase or decrease in the actual quantum of Consultancy Charges receivable by each member of the Group. As long as if the aforesaid prescribed condition is not observed and complied with, the appellant is not entitled to the receipt of Consultancy Charges. Therefore, the appellant's right to receive consultancy fees will arise only at the point of time when the pattern of distribution as well as the quantum of distribution have become final after proper publicity on the Notice Board of the CCMB and after taking into consideration objections, if any. Since this essential pre condition has not been satisfied, the appellant is not vested with any right to receive his share of Consultancy Charges irrespective of its actual payment. If the CCMB had paid this amount to the appellant through mistake or oversight for whatever reason, such payment would not create a debt in favour of the appellant at a premature stage. The present situation cannot also be compared with voluntary surrender of an accrued amount. It cannot also be said that the amount in ....
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....eem it fit to admit this fresh evidence, because it became available only after the Commissioner of Income-tax (Appeals) had passed his order and so could not have been produced before him or earlier. Further, the evidence is only supportive of the contentions made out before the Assessing Officer. At any rate, no objection was taken by the learned Departmental Representative for its admission. The paper book includes at page-4, a letter dated 13th October, 1997, addressed by the Senior Controller of Administration (CCMB) to the Commissioner of Income-tax (Appeals), though after the appellate order had been passed. This letter reads as under: "Sir, I am directed to state that in Appeal No. 29/ITO/4(3)/CIT(A)I/94-95 disposed off by you, and orders which have been passed by you were that the income-tax deducted from the honorarium paid by CCMB to Dr. P.M. Bhargava in 1992-93 was not correct, as the procedure for distribution of honorarium was not followed. When the matter went to DG, CSIR, New Delhi, CSIR Headquarters has directed the laboratory to follow the procedure once again and distribute the honorarium to Dr. Bhargava now. Action has now been taken accordingly. The amount wh....
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..../- (K.R. Sarma) Sr. Controller of Administration" ------------------------------------------------------------------------------------ The learned counsel for the assessee could not furnish a copy of the Circular dated 6-7-1992, referred to in the above O.M. of CCMB, dated 2-8-1997, but it appears from the said Memorandum of CCMB that CCMB had to display the pattern of distribution as urged by the assessee in 1997. Thereafter, they made the payment of Rs.59,556 after deducting Tax at source, vide letter dated December 2, 1997, which is at Page-1 of the assessee's paper book and reads as under: "Respected Dr. Bhargava, Kindly find enclosed herewith a cheque No. 341789 dated 2nd December, 1997 of State Bank of Hyderabad, Habshiguda Branch, Hyderabad for Rs.59,556 (Rupees fifty-nine thousand five hundred and fifty-six only) towards consultancy honorarium in respect of Sun Pharma Project. I request you kindly to acknowledge receipt of the cheque. With respectful regards, Sd/- (K.R. Sarma)" In the light of the above, I agree with the contention of the learned counsel for the assessee that the right to receive Rs.61,945 did not accrue to the assessee within the year of accou....