1975 (12) TMI 55

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.... date of vesting of the estate or whether it could accrue only after the amount of compensation was quantified and ascertained under Chapter 5 of the Orissa Estates Abolition Act, 1951 ? (2) Whether, in the facts and circumstances of the case and in the absence of accounts maintained by the assessee either in mercantile or cash system, and in view of sections 4 and 5 of the Income-tax Act, 1961, income arising to the assessee by way of interest is assessable to tax when it accrued or when it was received ? " Assessee was the ex-proprietor of the erstwhile Kanika Estate which was abolished under the provisions of the Orissa Estates Abolition Act (1 of 1952). In the accounting year ending on March 31, 1965, the assessee, along with the ....

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....nd, therefore, interest paid along with the quantified compensation must be taken to have accrued as income during the year in question. The Appellate Tribunal has come to the conclusion that the interest in respect of the compensation due has to be charged in the year in which it accrued or has become due to the assessee. Placing reliance on the provision of section 37(3) of the Orissa Estates Abolition Act, and sections 4 and 5 of the Income-tax Act, the Tribunal held that income that accrues or arises in a particular year becomes chargeable in that year and only when accounts are maintained on cash basis, such income may be charged in the year in which it is received. Accordingly, the Tribunal accepted the assessee's claim and gave relie....