# North v. Chandulal Kesha

- **Citation:** [1973] 3 S.C.R. 902
- **Court:** Supreme Court of India
- **Decided:** 1973-04-04
- **Case number:** Civil' Appeal No. 242 of 1970
- **Bench:** K. S. Hegde, H. R. Khanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/north-v-chandulal-kesha-6578
- **Pages:** 9

## Headnote

Indian Income Tax Act 1922--S. 10(2) (xv)-Whether an
amount
·.foregone b;y the assessee as Managing Agency _Conunission and an an1ount
foregone cs office allowance lVas allowable as Revenue Expendlture.
These are all connected appeals. The a55cssee-rcspondent was the
. .managipg agent of two companies N. & G. As Managing Agent of N
Campany, it was entitled to receive a commission of 12~% on the net
profits of the Managed Company together with a sum of Rs. 18,000/ •
. as office allowance.
In the case of G company, the assessee was entitled
to get an allowan<'Je of Rs. 30,000/- in "'ddition to its agreed commission. In all these appeals,. certain questions were submitted
by . the
Tribunal to the High Court. In Civil' Appeal No. 242 of 1970 only
one question was submitted and in the other two cases, i .. e., Civil Appeal
'No. 243 and 244 of 1970, two questions we.r·o submitted.
In the first appeal, the question submitted was whether
on
the
facts and circumstances of the case, a certain sum said to have beien
foregqn·e . by the assessce as managing agency commission was allowable
:.as revenue expenditure. Similar questions were called
for,
for
the
remaining two assessment years as well and in
addition,
one
;more
question \V'aS submitted as to whether certain .sum, said to have beien
'foregone by the assessce as. office allowanc'e was allowable as revenue
iexpcnditure under th(( J~ome Tax Act. The assessment
years
\\'ere
!954-55, !955-56 and !956-57.
The. High Court came to the conclusion that it is not necessary to
answer the common question referred to in all these appeals because
it was academic; but the question relating to the office allowance ~vas
·answered in favour of the assessec.
·
In the relevant ac1cou.inting years, the asscssee gave up the managing
agency commission from both tlw managed companies.
It al~o gave up
the office allowance due from G. Company. The "ccounting years of
both the asscssee company as \Vcll as the managed companies \Vere the
financial year. The commissiori. was given up by the asscssee company
after the ~.nd of the fin-ancial year, but before the ac~ounts of the
managed c,ompany were made up. The accounts of the managed companies. were made up some time during the end of September of the
year following the respective accounting years.
But in the
case
of
office allowance, the same was given up even before the end of the finii.n-
" cial years.
,
·
!Jn the bash. o~ these facts, the I. T. 0. ~s well as
the
Appellate
Ass1sta:nt 1 Coo:nm1ss1oner held that the dcduc~1ons claimed
were
not
allowable. As regards the commission, .they came to the conclusion that
·the same having accrued at the end of each of the financial years, the
agency giving up the same subsequent to these dates,- docs not bring
the case under s. 10(1) of the Income-tax Act. So for as tho
offico
allowanc~ was concerned, they caffie to the conclusion that there was
110 justification for giving up the sanw. The
Income Tax
Appellate
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903
Tribunal differed from this vie~ and held that to the 'extent the commission was give)tl up, the asscssee company had no Income
at al!·
In
other words, the commission that was, given up caIUiot be cons1ckred
as the real income of the assessee company. Therefore, it i3 an all'Ow
4
able expenditure under s. 10(2)(xv). As regards the office allowance
the Tribunal held that the same
was
allowable
deduction
under
s/ 10(2) ()<.!').
The
Tri,bunal
further
held
that
the
comm1ss10n
as well as th!'! cffic.e allowance were given tip by the asscssee on the
ground of ·commercial expediency. The High Court agreed with this
view takqo by the Tribunal.
Dismissing the appeal,
HELD : (i) As regards office allowance, following C.I.T.
Bombay
North v. Chandulal Keshavlal & Co., 38 I.T.R. 601
the
Tribunal
was fully justified in· coming to the conclusion that
the
expenditure
incurred came within the scope of s. 10

## Text

"
·902
COMMISSIONER OF INCOME-TAX WEST BENGAL-II,
CALCUITA
v .
M/S. BIRLA GWALIOR (PVT.) LTD.
April 4, 1973 .
.
[K. S. HEGDE .AND H. R. KHANNA, JJ.J
Indian Income Tax Act 1922--S. 10(2) (xv)-Whether an
amount
·.foregone b;y the assessee as Managing Agency _Conunission and an an1ount
foregone cs office allowance lVas allowable as Revenue Expendlture.
These are all connected appeals. The a55cssee-rcspondent was the
. .managipg agent of two companies N. & G. As Managing Agent of N
Campany, it was entitled to receive a commission of 12~% on the net
profits of the Managed Company together with a sum of Rs. 18,000/ •
. as office allowance.
In the case of G company, the assessee was entitled
to get an allowan<'Je of Rs. 30,000/- in "'ddition to its agreed commission. In all these appeals,. certain questions were submitted
by . the
Tribunal to the High Court. In Civil' Appeal No. 242 of 1970 only
one question was submitted and in the other two cases, i .. e., Civil Appeal
'No. 243 and 244 of 1970, two questions we.r·o submitted.
In the first appeal, the question submitted was whether
on
the
facts and circumstances of the case, a certain sum said to have beien
foregqn·e . by the assessce as managing agency commission was allowable
:.as revenue expenditure. Similar questions were called
for,
for
the
remaining two assessment years as well and in
addition,
one
;more
question \V'aS submitted as to whether certain .sum, said to have beien
'foregone by the assessce as. office allowanc'e was allowable as revenue
iexpcnditure under th(( J~ome Tax Act. The assessment
years
\\'ere
!954-55, !955-56 and !956-57.
The. High Court came to the conclusion that it is not necessary to
answer the common question referred to in all these appeals because
it was academic; but the question relating to the office allowance ~vas
·answered in favour of the assessec.
·
In the relevant ac1cou.inting years, the asscssee gave up the managing
agency commission from both tlw managed companies.
It al~o gave up
the office allowance due from G. Company. The "ccounting years of
both the asscssee company as \Vcll as the managed companies \Vere the
financial year. The commissiori. was given up by the asscssee company
after the ~.nd of the fin-ancial year, but before the ac~ounts of the
managed c,ompany were made up. The accounts of the managed companies. were made up some time during the end of September of the
year following the respective accounting years.
But in the
case
of
office allowance, the same was given up even before the end of the finii.n-
" cial years.
,
·
!Jn the bash. o~ these facts, the I. T. 0. ~s well as
the
Appellate
Ass1sta:nt 1 Coo:nm1ss1oner held that the dcduc~1ons claimed
were
not
allowable. As regards the commission, .they came to the conclusion that
·the same having accrued at the end of each of the financial years, the
agency giving up the same subsequent to these dates,- docs not bring
the case under s. 10(1) of the Income-tax Act. So for as tho
offico
allowanc~ was concerned, they caffie to the conclusion that there was
110 justification for giving up the sanw. The
Income Tax
Appellate
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C.I.T. v. BIRLA GWALIOR PVT. LTD.' (llegde, J.)
903
Tribunal differed from this vie~ and held that to the 'extent the commission was give)tl up, the asscssee company had no Income
at al!·
In
other words, the commission that was, given up caIUiot be cons1ckred
as the real income of the assessee company. Therefore, it i3 an all'Ow
4
able expenditure under s. 10(2)(xv). As regards the office allowance
the Tribunal held that the same
was
allowable
deduction
under
s/ 10(2) ()<.!').
The
Tri,bunal
further
held
that
the
comm1ss10n
as well as th!'! cffic.e allowance were given tip by the asscssee on the
ground of ·commercial expediency. The High Court agreed with this
view takqo by the Tribunal.
Dismissing the appeal,
HELD : (i) As regards office allowance, following C.I.T.
Bombay
North v. Chandulal Keshavlal & Co., 38 I.T.R. 601
the
Tribunal
was fully justified in· coming to the conclusion that
the
expenditure
incurred came within the scope of s. 10(2) (xv). The only contention
advanced by the appellant was that the allowance was paid to meet
certain expenses i!O'Curred by the asscS:Seei company.
Therefore,
the
. assessec could not have given up the same.
This c.'.ontenti'On makes no
difference in law.
The ratio of the decision of this Court in Cham/u ..
la/'s case completely covers the point under corrsidcration .. IL906B]
(ii) The question regarding giving up of the commission, no due
date was fixed for the payment of th., commission under the managing
agency agreements. Th·e conimission receivable could have been ascertained only after the managed company made up its
ac~punts. The
assessce had given· up the commission even before the managed company
made up its accDunts. -Hence, the fact that the assesscc company was
maintaining its accounts on the basis of mercantile system cannot lead to.
the conclusion that the commission ac.~rued to 'it by the end of the relevant
acoou!t'Aing year. It was the real income of the -assessee company that ·
was liable to tax and the real income could not be arrived at without
taking into account the amount given up by the assessee. Therefore,
in the present case, the contention of the revenue. that a surrender ~of
the commiss'icn under the provisions mentioned in the agreement were
not dcductable for the purposes of Income Tax, cannot be sustained.
[906 Fl
.
Poona Electric Supply Co. Ltd. v.
Conunissioner
of . lnco111e-tax,
Bombay City !, 57
I.T.R.
521
TI. M. Kas/iiparek/J & Co. Ltd.
v.
Comnu"ssioner of lncon1e-tax, Bo1nbay North, Kutch & Saurashtra. 39
I.T.R .. 706, referred to.
·
The question whether
the -giv.en
up
commission
comes
under
s. 10(2) (xv) depended on whether. the
income
had
really
accrued
or not.
It is not a hypothetical accrual of income that has got to be
taken into cionsid~ration but the real accrual of the income.
In the
present case, since there was ·no re"al accrual of Income, .the assessee \Vas
not liable to tax for this amount.
CIVIL· APPELLATE JURISDICTION : Civil. Appeal Nos. 2.42 to
244 (NT) of 1970. ·
Appeals by certificate from the judgment . and · order dated
April 22, and 23, 1969 of the Calcutta High Court in Income-tax
Reference Nos. 187, 188 & 189 of 1963.
S. T. Desai, B. B. Ahuja, S. P. Nayar and R. N. Sachthev, for
the appelJant (in C.A. No. 242).
'
\
904
SUPREME COURT REPORTS
[J 973] 3 S.C.R.
B B. Ahuja, S. P. Nayar and R. N. Sachthey, for the appellant
A
(in C.A. Nos. 243-244).
·
D. Srn, Leila Seth, U. K. Khaitan and B. P. Maheshwari, for
the respondent.
The Judgment of the Court was delivered by
HEGDE, J.-These are connected appeals by certificate. They
relate to respondent's assessment for the assessment years 1954-55,
1955-56 and 1956-57. The previous financial years are the relevant accounting year$.
In all these appeals, as directed' by the High Court of Calcutta
under S.66(2) of the Indian Income Tax Act, 1922,
certain
questions were subjnitted by the Tribunal.
In the first case i.e.
Civil Appeal No. 242 of 1970 enly one question was submilted
and in the other two cases i.e., Civil Appeals Nos. 243 and 244
of 1970, two questions were submitted.
The question submitted
in the first case is as follows :
"Whether on the facts in !he circumstances 0: the
case the sum of Rs. 1, 11, 779 said to have been foregone
by the assessee as Managing Agency commission was
allowable as a revenue expenditure
under S. 10(2)
(xv) of the Indian Income-tax Act, 1922 for the assessment year 1954-55" ?
Similar q~estions were called for the remaining two assessment years as well. But, in addition, one more question, namely :
"Whether on the facts and in the circumstances of
the case the sum of Rs. 30,000 said to have been foregone by the assessee as office allowance receivable from
Gwalior Rayon and Silk Manufacturing Co. Ltd. w1s
allowable as a revenue expenditure under Section 10(2)
(xv) of the Indian Income Tax Act, 1922 for the. assessment years, 1955-56 and 1956-57, was called for."
At the hearing, the High Court came to the conclusion that it
is not necessary to answer the common quesion referred to in all
these three appeals as the same was academic but the question
relating to the office allowance was an•wered in favour of the
assessee following the decision of this Court in Commissioner of
Income tax Bombay North v. Chand!tlal Keshavlal & Co. ( 1 )
The material facts of the case may now be stated. The assessee
-respondent is the managing agent of the National Bearing Co.
Ltd. and Gwalior Rayon and Silk Manufacturing Co. As managing agent of the former company it was entitled to receive a commission of 12t per cent on the net profits of the managed company
together with a sum of Rs. 18,000 as office allowance. In the
(1, JS J.T.Jl.. 601.
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C.1.T. v. BIRLA GWALIOR PVT. LTD, (Hegde, J.)
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case of Gwalior Rayon and Milk Manufacturing Co. the assessee
was entitled to get an office allowance of Rs. 3{),000 per year,
in addition to the agreed managing agency commission.
In the
relevant accounting years the assessee gave up the qJ.anaging agency
commission due from both the managed companies. It also gave
up 'the office allowance due from Gwalior Rayon and Silk Manufacturing company.
The accounting )ears of both the assessee
company as well as the managed companies were the financial
years.
In the agreement entered into between the assessee company and the managed companies no date for payment of the managing agency commission appears to have . been stipulated.
The
commission was given up by the assessee com.parry after the end
of the financial year but before the accounts of the managed Co.
were made up. The accounts of the managed companies appear
to have been made up somewhere during the end of September
of the year following the respective accounting years. But, in the
case of office allowance the same was given up even before the
end of the financial year. On the basis of these facts the Incometax Officer as well as !he Appellate Assistant Commissioner came
to the conclusion that the deductions claimed were not allowable.
As regards the commission, they came to the conclusion that the
same having accrued at the end of each of the financial years,
the assessee giving up the same subsequent to those dates does not
bring the case under S. ! 0 (1) of the Act and no case was made
out under S.10(2) (xv). So far as the office allowance i; concerned they came to the conclusion 1hat there was no justification
for giving up the same.
The Income-tax Appellate Tribunal differed from the view
taken by the Income-tax Officer and the Appellate Assistant Commissioner. Dealing with the question of commission it came to the
conclusion that to the extent the commission was given up the
assessee company earned no income at all. In other words the
commission that was given up cannot be considered as·-the real
income of the assessee company. It further came to the conclusion
·that under any circumstance it is an allowable expenditure under
S. 10(2) (xv). As regards the office allowance, the Tribunai was
of the opinion that the same was an allowable deduction under
S. 10(2)(xv). The Tribunal held that the commission as well
as the office allowance were given up by the assessee on the ground
of commercial expediency. The High Court agreed with the view
taken by the Tribunal.
We will first take up the question relating to the office allowance. According to the finding of the Tribunal the assessec com·
pany gave up !he office allowance on the ground of cort1mcrcial
expediency. It opined that the managed company's financial position was not sound during the relevant accounting years and it
l0-L797SL•P· C.T.173
906
SUPREME COURT REPORTS
(1973] 3 s.c.R.
was necessary for the assessee company to give up the office allowance in order 'to stabilise the jinances of the managed company.
The Tribunal further came to the conclusion that because
o.f
the sacrifices made by the assessee company, the finances of the
managed company improved su~sequently, as a result of which
the assessee company was able to earn more profits in the later
years. This is a finding of fact. That finding was binding on the
High Court.
On the basis of that finding the Tribunal was fully
justified in coming to the conclusion that the expenditure incurrel"
came within the scope of S. J0(2)(xv). That conclusion is supported by the decision of this Court in Chandulal's case (supra).
The only contention advanced in this Court in respect of the office
allowance was that it was paid to meet certain expenses incurred
by the assessee company; consequently the assessee could not have
given up the same.
We do not know whether the office allowance
was paid solely for that purpose or whether it was partly as reinuneration and partly to meet the expenditure incurred.
In either
case it makes no difference in law.
The ratio of the decision
of this Court in Chandulal's case completely covers the point under
consideration.
Now turning to !he question regarding giving up
of
the
commission, as mentioned earlier, the assessee was maintaining
its accounts on the basis of mercantile system.
Its ac~ounting
year was the financial year.
It gave up the commission after
the .end of the financial year.
On the basis of these
facts it
was contended on ~half of the Revenue that the commission had
accrued betore it was given up.
Hence it cannot be said
that
the assessee had not earned the commission in question.
Therefore, the assessee's case cannot be considered under S.10( 1).
We are unable to accept this contention as correct.
As mentioned earlier no due date was fixed for the payment of the
commission
under the managing agency agreements.
The
commission receivable could have been ascertained only after
the managed company made up its accounts.
The assessee had
given up the commission even before the managed company made
up its accounts. Hence !he mere fact that the assessee company
was maintaining its accounts on the basis of mercantile system
cannot lead to the conclusion that the commission had accrued to
it by the end of the relevant accounting year.
This is also the
view taken by the Bombay High Court in H. M. Kashiparekh &
Co. Ltd. v. Commissioner of Income-tax, Bombay North, Kutch
& Saurashtra. (')
The facts of that case are somewhat similar
to the facts of the present case.
Therein the assessee
which
maintained its accounts on mercantile system was the managing
agent of a. paper mill company.
Under the managing agency
(1) 39 I. T. R. 706.
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C.I.T. v. BIRLA GWALIOR PVT, LTD, (Hegde, J.)
907
agreement it was under a duty to forego upto one-thirds of its
commission where the profits of the managed company were not
sufficient to pay a dividend of 6 per cent.
For the accounting
year ending March 31, 1950, the assessee earned a commission
of Rs. 1,17,644, that as a result of the resolutions passed by the
managed company and the assessee company the assessee gave
up a sum of Rs. 97 ,000 in December, 1950. The Appellate
Assistant Commissioner held that the maximum amount the
assessee was bound to forego was only Rs. 39,215 and included
the balance of the amount foregone, viz., Rs. 57,785/-
in the
taxable income.
The Appellate Tribunal, however, found that
the sum of Rs. 57, 785 was. also given up for reasons of commercial expediency.
Affirming the decision of. the Tribunal
the
High Court held that it was the real income of the assessee company
for the accounting year that was liable to tax and that
the real income could not be arrived a:t without taking
into account the amount foregone by the assessee.
In ascertaining the real income the fact that the assessed followed
the
mercantile system of accounting did not have any bearing. The
accrual of the commission, the making of the accounts, the legal
obligation to give up part of the commission, and the foregoing
of the commission at the time of the making of the accounts were
not disjointed facts : there was a dovetailing about them which
could not bJl ignored.
The real income of the assessee
was
Rs. 27,644 and the amount of Rs. 97,000 foregone by the assessee
could not be included in the real income of the assessee for the
accounting year.
Rejecting the contention that merely because
the assessee maintained its accounts on the basis of mercantile
system, the income must be held to have accrued at the end of
the accounting year, the High Court observed "even so, (the
failure to produce account books) we shall proceed on the footing
that, the assessee company having following the mercantile system
of account, there must have been entries made in its books in
the accounting year in respect of the amount of the commission.
In our judgment, we would not be justified in attaching any particular importance in this case to the fact that the company followed
the mercantile system of account.
That would not have any
particular bearing in applying the principle of real income to
the facts of this case."
This decision was cited with approval
by this Court in Poona Electric Supply Co. Ltd. v. Comrni>sioner
of Income-tax, Bombay city I.('')
Dealing with that decision
this is what this Court observed : "The conceot of 'real income'
is also expounded in the decision of the Bombay High Court in
H. M. Kashiparekh & Co. Ltd. v. Commissioner of Income-tax
(supra). There, under the managing agency agreement the
managing agent was under a duty to forego up to one-third of
(1) l7 I. T. R. Sil.
908
SUPREME COURT REPORTS
[1973) 3 S.C.R.
its commission where the profits of the managed company were
A
not sufficient to pay a dividend of 6 per cent. The contention
of the revenue that such surrender of the commission under the
provisions mentioned in th~ agreement was not deductible for
the purpose of income-tax was negatived. The principle has been
succintly stated in the head-note thus :
"The principle of real income is not to be so subordinated
as to amount vir'tually to a negation of it when a surrender or
concession or rebate in respect of managing agency commission
is made, agreed to or given on grounds of commercial expediency,
simply because it takes place some time after the dos~ of an
accounting year.
In examining any transaction and
situation
of this nature the court would have more regard to the reality and
speciality of the situation rather than the purely theoretical or
doctrinaire aspect of it. It will lay greater emphasis on the business aspect of the matter viewed as a whole when that can be
done without disregarding statutory language".
Mr. S. T. Desai, learned counsel appearing for the Revenue
contended that the facts of this case are governed by the rule
laid down by this Court in Morvi Industries Ltd. v. Commissioner
of Income-tax (Central), Calcutta(').
We do not think thatsubmission is correct.· Facts of that case are :-The assessee, which
was the managing agen1 of its subsidiary company, maintained
its accounts on the mercantile system.
It was .entitled to receive
an office allowance of Rs. 1,000 per month, a commission
of
12t per cent, of the ne1 profits of the managed company and an
additional commission of 1 t per cent on all purchases of cotton
and sales of cloth and yarn.
In the accounting years ended on
December 31. 1954 and December 31,
1955, the managed
Company suffered losses and the assessee earned only commission
on -the sale of cloth and yarn for the two years. The total amounts,
including the office a\lowancc which the assessee was entitled to
receive were Rs. 50,719 and Rs, 13.963 for the two years. Under
clause 2 ( e) of the managing agency agreement the commission
was due to the assessee on December 31, 1954 and December 31,
1955, respectively, and it was payable immediately after
the
annual accounts of the managed company was passed in general
meetings, which were held on November 24, 1955, and July 21,
1956, respectively. By resolutions of its board of directors dated
respectively, April 4, 1955, and June 19, 1956 [i.e., after the
co1;;111ission had become due but before it had become payable
in terms of clause 2 (2) ], the assessee relinquished its commission
on sales and office allowance because the managed company had
been suffering heavy losses in the past years. The Tribunal held
(,) 82 I. T. R. 835.
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C.I.T. v. BIRLA GWALIOR PVT, LTD, (Hegde, !.)
909
that the relinquishment J:W the assessee of its remuneration after
it had become .4ue was of no effect; and also rejected its claim that
the amounts relinquished were allowable under section 10(2) (xv)
of the Income-tax Act, 1922, because, as a result of the relinquishment, the financial position of the managed company did
not
become stronger while that of the assessee-company became weaker
and, therefore, the relinquishment was not for the benefit of 1he
assessee.
On a. reference the High Court agreed with the view
taken by the Tribunal. On appeal this Court affirmed the decision
of the High Court.
AS seen from the facts of that case the commission given up
had accrued on the 31st December, 1954 and 31st December,
1955, respectively, and the assessee purported to give up that
commission several months thereafter.
Further, the Tribunal in
that case had come to the conclusion that the assessee did not 2ive
up 1he amounts in quesion for commercial
expediency.
This
Court came to the conclusion that the amounts in question were
due at the 31st December, 1955 and 1956, though payable at a
later date. Consequently, those amounts had accrued long before
they were given up and the giving up of the same did not come
within the scope of section I 0 (I ) . It is true that in the course of the
judgment emphasis was also placed on the fact that the assessee
was m~intaining its accounts on the basis of mercantile system, but
it was not on that basis alone that this Court came to the conclusion that the income in queston accrued on 3 lst Decemher,
1955 and 31st December, 1956.
In arriving at the conclusicin
that the income in question accrued on the 31st December, 1955
and 31st December, 1956, this Court primarily took into consideration the terms of the agreement.
In the course of the judgment
delivered by one of us, Khanna, J., passage from the judgment of
this Court in Commissioner of Income Tax Bombay City Iv. Messrs.
Shoorji Valiabhadas and Co.( 1 ) was quoted in support of the
conclusion reached by this Court. That passage reads thus :
"Income-tax is a levy on income.
Though the Income-tax
A-ct takes into account two points of time at which the liability
to tax is attracted, viz., the accrual of the income or its receipt,
yet the substance of the matter is the income. If income does not
result at all, there cannot be a tax, even though in book-ke«ping,
an entry is made about a 'hypothetical inr:ome'. which doer not
materialise.
Where income has, in fact, been received and
is
subsequently given up in such circumstances that it remams the
income of the recipient, even though given up, the tax may be
payable.
Where, however, the income can be said not to /1ave
resulted at all, there is obviomly neither accrual nor receim of
income, even though an entry to that effect might, in certain
(I) 46 I. T. R. 144.
'-
910
SUPREME COURT REPORTS
[1973] 3 s.c.R.
circumstances, have been made in the books of account" (emphasis
supplied). Hence it is clear that this Court in Morvi Industries'
case did emphasise the fact that the real question for decision
was whc;ther the income had really accrued or not. It is not a
hypothetical accrual of income that has got to be taken into
consideration but the real accrual of the income.
In addition to the contentions taken earlier, Mr. Desai also
took objection to the way in which the High Court disposed of
these cases. It may be noted that the High Court came to the
conclusion that the findings reached b(y the Tribunal were findings
of fact and, therefore, it would not be proper for the High Court
to interfere with the same but Sltrangely enough, at an earlier stage
the High Court called for the questions referred to earlier, under
S. 66 ( 2) . If the questions raised are concluded by the facts found
by the Tribunal the High Court was not justified in calling for
those questions.
Fu~ther when the High Court issued the rule on
the applications made by the Revenue, the assessee not
only
objected to the prayer made by the Revenue, but also submitted
that in case the Court was pleased to direct the Tribunal to Stalce
a case, It may also be pleased to direct the Tn1*mal to submit
the question "whether the commission given up can be considered
as real income coming within the scope of S. l 0(1) ?" But, the
High Court rejected that prayer but merely called upon the
Tribtlnal to submit the questions set out earlier. 'J'he High Court
has now come to the conclusion that the COffiil!ission given up
by the assessee cannot be considered as it real income. It is undoubtedly true that there are certain incongruities in the procedure
adopted by the High Court but the final conclusion reached by
the High Court is, in our opinion, correct in law. Therefore, the
High Court was justified in refusing to answer the first question
in all the three cases.
In the result these appealli fail and they are dismissed with
costs; one set of hearing fee.
s.c.
Appeals dismissed_
A
B
c
D
F