1993 (11) TMI 33

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.... the year under consideration, the interest amount of Rs. 29,312 had not accrued to the assessee and could not be brought to tax in its hands?" The brief facts of the case are that while examining the balance-sheet submitted by the assessee, a note was given by the assessee's auditor that a sum of Rs. 1,28,296.24 receivable from Messrs. Podar Trading Company (P.) Ltd. in respect of the debt Rs. 67,450 and interest and compensation of Rs. 60,880. The company has referred the matter for arbitration and as per the award dated October 28, 1974, of the arbitrator, Shri A. A. Kala, the company was to receive Rs. 92,415.67 as principal amount and Rs. 35,880.37 as interest up to the date of award. The company had approached the court of the Dist....

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....ted as income. The Commissioner of Income-tax (Appeals) found that the principle involved in respect of accrual of the income is that the assessee should acquire the right to receive that income, and whenever there is a dispute in respect of right to receive, the amount crystallises not at the moment the claim is first made but at the moment it is decreed or the claim is admitted. It was observed that the claim of interest would arise from the date of the award of the arbitrator and the fact that the award was not accepted and further appeal has been filed is not material. The assessee was found to be maintaining the mercantile system of accounting. The appeal was accordingly dismissed. In the second appeal before the Tribunal, it was fo....

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....ccounts which was duly complied with. There was an agreement between the assessee and Messrs. Podar Trading Company (P.) Ltd. that, in case of any dispute, the matter would be referred to arbitration. In the proceedings before the arbitrator. None appeared on behalf of Messrs. Podar Trading Company (P.) Ltd. and it is mentioned that initially there was a claim for a different figure but Messrs. Podar Trading Company (P.) Ltd. agreed in the earlier proceedings that a sum of Rs. 92,415.67 was payable and sheet F of the paper book before the arbitrator for that purpose was relied upon. It has not been stated as to what has happened in the proceedings before the District Judge, Jaipur, where the matter was challenged by Messrs. Podar Trading Co....