TMI Blog1960 (8) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... could be deemed to be received by the assessee as income, profits and gains during the previous years. The facts of this case are not in dispute. The assessee company entered into a contract for forward sale of 79 teeps of mustered on February 5, 1952, with a private chamber of commerce, namely, the Bharat Co. Ltd. at the rate of fell, the chamber cancelled the transaction on February 7, 1952. On February 28, 1952, the assessee company sent a telegram to the chamber to the effect that if the chamber did not inform it within four hours of the receipt of the telegram about per maund, it would, presume that the chamber had accepted the settlement of the assessee's outstanding bargain at that rate. No response was, however, made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s appeal was allowed and its contention was accepted. While dealing with this matter, the Tribunal has observed as under: The liability of the other contracting party to the assessment is yet in dispute. IT is not till the assessee becomes indisputably entitled to the sum of ₹ 94,000 old or any other sum, that income, profits and gains can be said to accrue or arise to the assessee in respect of the transaction of February 5, 1952. The sum of ₹ 94,000 odds is, therefore, excluded from the assessment. An application was made to the Tribunal under section 66(1) of the Act and was refused by the Tribunal on December 28, 1956. While refusing the application, the Tribunal observed as under: Bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the taxable territories shall be deemed to accrue or arise in the taxable territories, wherever paid if it is earned in the taxable territories but any person payable outside India to a person residing permanently outside India shall not be deemed to accrue or arise in the taxable territories, if the pension is payable to a person referred to in article 314 of the Constitution or to a person, who, having been appointed before the 15th August, 1947, to be a Judge of the Federal Court or of a High Court within the meaning of the Government of India Act, 1935, continues to serve on or after the commencement of the Constitution as a Judge in India.......... Explanation 3.--A dividend paid by an Indian company without the taxable territori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and, therefore, contended on the basis of the expression deemed to accrue that it is not necessary that the amounts must accrue in reality and, therefore, even a claim to an amount would come within the ambit of the aforesaid expression. This is to misread the provisions of law. The words deemed to accrue have only relation to what has been so made to accrue under the provisions of the Act; whereas it was not in reality so, but by force of the state it is treated to be so. This matter is settled beyond controversy: see in this connection the decision of the Privy Council in Commissioner of Income-tax v. Bombay Trust Corporation Ltd., the decision of the Federal Court in Raja Bahadur Kamakshya Narain Singh v. Commissioner of Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to the mercantile procedure and the amount of ₹ 94,000 odd had actually been entered in his account books as profit accruing on the date when the accounts were settled and a telegram was sent to the chamber from whom the amount is claimed, the amount must be treated as profit which accrued to the assessee company on respect of profits accrued or not, is a question of fact depending on the peculiar circumstances of any particular case. In the preset case, we find, as has been very clear set out by my Lord, Mahajan, J., that the profit was not actual, it had not accrued and was merely being claimed, so, the profits is nothing more than a notional figures which the assessee hopes to get. As has been pointed out by my brother, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uest was refused and so the director assessee claimed that the profits, which had been shown by him in his books kept according to the mercantile system, should not be treated as due profits. The Supreme Court held that these profits had accrued and that, therefore, the director was rightly assessed in respect of them. Now, in this case there was no dispute whatsoever with regard to the fact that the amount of commission was to be paid to the assessee. The only question was when it should be paid and whether it should be paid in cash or should be set off against the debt due from him. The amount had clearly accrued and was debited in the company's own account; it was credited in the assessee's account, although was not actually rece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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