1963 (11) TMI 2

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....253 or any part of it accrued or arose or could be deemed to accrue or arise, or was received or could be deemed to be received by the assessee as income, profits and gains during the previous year. " The facts are few. The assessee entered into a contract for the forward sale of certain quantity of mustard on February 5, 1952, at Rs. 27-8-0 per maund. The price fell soon thereafter, and the purchaser purported to cancel the contract before the due date which was June 7, 1952, but the assessee refused to accept the cancellation. On February 28, 1952, the assessee sent a telegram to the purchaser that if the purchaser did not inform it within four hours that it accepted a settlement of the contract at Rs. 16-14-6 per maund, the assessee wo....

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....ettled but in fact went to the court on the basis of such a settlement. The assessee appealed to the Appellate Assistant Commissioner but the appeal failed. The assessee then appealed to the Tribunal which allowed it and made the followirg observation : " The Income-tax Officer was of the opinion that since the assessee was adopting a mercantile basis and had according to his own claim considered that a sum of Rs. 94,253 was due to the assessee from the other contracting party, the aforementioned sum had necessarily to be treated as the assessee's income of the relevant year of account. It seems to us that the reasoning adopted in this case by the Income-tax Officer and the Appellate Assistant Commissioner is unsound and untenable. The li....

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....bserved : " ... the question whether an entry, which is made, is in respect of profits accrued or not, is a question of fact depending on the peculiar circumstances of any particular case. " We are unable to agree with this view. The facts have been ascertained in the present case. The only question is one of law, namely, whether on those facts the income could be said to have accrued to the assessee. The learned Chief Justice expressed his agreement with the view on which Mahajan J. based himself in refusing the application and we have earlier said that that view is, in our opinion, incorrect. It seems to us clear that the question of law as framed by the Commissioner does arise on the judgment of the Tribunal. An application under secti....