TaxTMI 
TaxTMI 
1960 (8) TMI 82
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....at Co. Ltd. at the rate of fell, the chamber cancelled the transaction on February 7, 1952. On February 28, 1952, the assessee company sent a telegram to the chamber to the effect that if the chamber did not inform it within four hours of the receipt of the telegram about per maund, it would, presume that the chamber had accepted the settlement of the assessee's outstanding bargain at that rate. No response was, however, made by the chamber to this telegram. This led to a suit by the assessee against the chamber for the recovery of Rs. 73,820-12-0 after adjusting a sum of Rs. 20,000 odd due from the assessee to the chamber on account of some earlier transactions. This suit was decreed by the District Judge, Bhatinda, on the 17th/27th of February, 1954. Against this decision an appeal is pending in this court. The present dispute relates to the assessment year 1953-54 and the account year 1952-53. In the return filed by the assessee the following note was appended: "According to the assessee there is a profit of Rs. 1,09,072 in the account of Bharat Co. Ltd., but the company does not admit it....
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.... argued that a question of law does arise and the Tribunal is wrong in holding that no question of law arises. In support of this contention, the learned counsel for the Department relies on the provisions of section 4 of the Income-tax Act. The relevant provisions on which reliance has been placed are in these terms: "4.(1) Subject to the provisions of this Act, the total income of any previous year to the provisions includes all income, profits and gains from whatever source derived which-- (a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or............ Explanation 2.--Income which would be chargeable under the head 'Salaries' if payable in the taxable territories shall be deemed to accrue or arise in the taxable territories, wherever paid if it is earned in the taxable territories but any person payable outside India to a person residing permanently outside India shall not be deemed to accrue or arise in the taxable territories, if the pension is payable to a person referred to in article 314 of the Constitution or t....
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....this connection the decision of the Privy Council in Commissioner of Income-tax v. Bombay Trust Corporation Ltd., the decision of the Federal Court in Raja Bahadur Kamakshya Narain Singh v. Commissioner of Income-tax [1947] 15 I.T.R. 311 and that of the Supreme Court in Keshav Mills Ltd. v. Commissioner of Income-tax [1953] 23 I.T.R. 230. The implication of this expression has been fully set out in Law and Practice of Income- tax by Kanga at page 172 and it is not necessary to reproduce that passage here. This provision itself clearly illustrates my point that only what has actually accrued will be taken note of for the purposes of section 4 of the Income-tax Act and not what has not actually accrued unless of course the Act itself makes what in reality has not accrued to be so. There are a number of provisions in the Act making amounts which have not accrued in reality as having accrued, for instance, Explanation 2 and 3 of section 4 and sub-section (2) of this very section, sub-section (2) of section 7, section 16, 18(4), 41, 42, 44D, etc. For the reasons given above, we see no force in the contention of the counsel for the Department. In our view, the decision arrived at by t....
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....tor was to be paid commission on sales, and during the accounting year a sum of over Rs. 2,00,000 was found payable to him. The company debited this amount in their accounts as income due to the director. The director, however, owed a sum of money to the company and he asked the company to set of this debt against the commission payable to him. This request was refused and so the director assessee claimed that the profits, which had been shown by him in his books kept according to the mercantile system, should not be treated as due profits. The Supreme Court held that these profits had accrued and that, therefore, the director was rightly assessed in respect of them. Now, in this case there was no dispute whatsoever with regard to the fact that the amount of commission was to be paid to the assessee. The only question was when it should be paid and whether it should be paid in cash or should be set off against the debt due from him. The amount had clearly accrued and was debited in the company's own account; it was credited in the assessee's account, although was not actually received by him. There was no dispute, therefore, that the amount had, in fact, accrued. In Sassoon....