1936 (3) TMI 7

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....tion of income of the calendar year ended 31st December, 1933, the sum of ₹ 38,965 on account of commission for the six months ended 31st December 1933." The assessee was a firm, which was acting as selling agents for a company known as Morarji Goculdas Spinning and Weaving Co. Ltd. under an agreement dated the 13th of January 1930, which is Ex. A. Under that agreement the firm got commission on goods which it sold on behalf of the company, and also on goods which the company sold directly to upcountry dealers. The system of accounting adopted by the firm was the method which is known as the mercantile method, that is to say, it accounted on the basis of commission earned, and not on the basis of commission actually paid. The sy....

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....hat money earned, which constitutes a debt, is not income, and that a debt accrued is not income accrued, but there is nothing in the case to show that the Income Tax Ordinance, which fell to be construed by the Board, contained the words "income profits and gains." At any rate, the only word with which the Privy Council were concerned in that case was the word income. They were dealing with an assessee who had not a business but was entitled to interest on a single sum; so that the only question was whether interest which had been earned but was not paid amounted to income, and the Privy Council held that it did not. Although an unpaid debt is not an income, it may be-as it seems to me-profits or gains, if it is treated as profit....