1991 (6) TMI 61

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.... assessee by way of compensation. The compensation as awarded was treated as the income of the accounting year which ended on March 31, 1977. The assessee took a point that the compensation was in the nature of a capital receipt and as such was not assessable as income. This contention was rejected by the Assessing Officer. On an appeal being preferred before the Commissioner of Income-tax (Appeals), the order of the Income-tax Officer was upheld. On further appeal to the Tribunal, the same view was taken. The assessee prayed for a reference which was rejected. On approach to this court under section 256(2) of the Income-tax Act, 1961, the Tribunal was directed to refer the following question of law : "Whether, on the facts and in the ci....

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.... the mercantile system. This submission is met by Shri Mahanti by contending that if the income had, in fact, accrued in those years and the assessee had not shown the same in its books of account, the present would be a case of suppression of income in which eventuality it would have been open to the Department to start reassessment proceedings. The failure of the Department to do so cannot be covered up by treating the compensation in question as income for the assessment year 1977 -78. We accept this submission of Shri Mahanti. The important point, however, is as to whether the income in the present case can be said to have really accrued during the years 1966-67 to 1968-69. As the assessee was maintaining the mercantile system of acc....