TMI Blog1976 (4) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. The assessee is an Association of Persons holding the gratuity fund in trust and realising income by investing it. It maintains accounts on mercantile basis. Three persons have been appointed as trustees of the fund to administer the same on the basis of the rules and regulations annexed in the trust deed. The company makes contributions to the trust fund as provided under clauses 14 (a) and (c). Clause 14 (b) provides for payment of interest at 3 1/2% per annum on the amount that remained unpaid by the company to the assessee. The amounts remained unpaid in terms of clause 14 of the trust amounted to Rs. 26,07,005 at the beginning of each of the two years under appeal. The Income-tax Officer came to the conclusion that the assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest income has been rightly included in the assessments made on the assessee. 6. The contention of the assessee is that the amounts remained unpaid by the company falls under clause 14 ('C') in respect of which there is no legal liability by the company to pay interest to the assessee and as the interest income on the unfunded amounts has not accrued to the assessee, the order of the Appellate Asstt. Commissioner should be upheld. 7. The short question for consideration is whether interest has accrued to the assessee in respect of the amounts that remained by the company. 8. The company in order to secure payment of gratuity to its employees in the event of termination of their service under the company otherwise than by retren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the company in respect of this sum of Rs. 26,07,005. In E.D. Sassoon Company Ltd. vs. Commissioner of Income-tax(1), it was pointed out: " it is clear, therefore, that income may accrue to an assessee without the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody. There must be as is otherwise expressed debitum in praesenti, solvendum in futuro................... Unless and until there is created in favour of the assessee a debt due by somebody it cannot be said that he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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