TMI Blog1999 (11) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the amounts of Rs. 87,538 and Rs. 2,76,767 relating to the assessment years 1981-82 and 1982-83 are not liable to be assessed during those years and in deleting the same from the respective assessments ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee became entitled to the commission only with effect from September 1, 1982, and that it will not relate back to July 27, 1979 ?" The factual position is almost undisputed and sans unnecessary details reads as follows : The assessee is a company in which the public are not substantially interested. It derives income from travel agency. For the assessment years 1981-82 and 1982-83, additions to the returned income were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounting, otherwise known as the mercantile system, income accrues or arises the moment the right to such income accrued or arose or is recognised or granted whether or not such income was received. The assessee became entitled to the commission only with effect from September 1, 1982, onwards and also for the period from July 27, 1979. The method adopted by the Assessing Officer and the Commissioner of Income-tax (Appeals) was held to be not in accordance with the mercantile system of accounting. The Tribunal held that since the income had been already assessed for the assessment year 1983-84, it could not be again assessed in the previous years. The Revenue's applications under section 256(1) were rejected. A miscellaneous petition was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with "Commission and beneficial services". So far as "commission" is concerned, it reads as follows : "Retroactive commission : (b) (i) notwithstanding sub-paragraph (a) of this paragraph the agency board, at the time of approving an agent, may authorise commission being paid on, international air passenger transportation sold by a member which such agent has referred to the member beginning with the date of receipt by the agency administrator or his representative, of the agent's successful application, or in exceptional cases, beginning with the agent's earlier application for approval ; (ii) the member shall only make such payment provided it has appointed the agent within two months from the date of the agency administrator's advi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 27, 1979. "Accrue" means "to increase, to augment, to be added as increase, to arise or spring as a natural growth or result". In order that income, profits or gains may accrue to a person, it is necessary that he must have acquired a right to receive the same or a right to the income, profits or gains has become vested in him though its valuation may be postponed or though its materialisation may depend on the contingency that the making up of the accounts would show income, profits or gains (see E. D. Sassoon and Co. Ltd. v. CIT [1954] 26 ITR 27 (SC) and CIT v. Shri Goverdhan Ltd. [1968] 69 ITR 675 (SC)). Thus, it is manifest that if an assessee acquires a right to receive income, the income can be said to accrue to him though it may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mous and are used in the sense of "bringing in as a natural result". Strictly speaking the word " accrue" is not synonymous with "arise", the former connoting the idea of growth or accumulation and the latter of growth or accumulation with a tangible shape so as to be receivable. There is a distinction in the dictionary meaning of these words, but throughout the Act they seem to denote the same idea or ideas very similar and the difference only lies in this that one is more appropriate when applied to a particular case (see CIT v. Ahmedbhai Umarabhai and Co. [1950] 18 ITR 472 (SC)). It may be taken that all the three expressions would not have been used unless it was though that they exhibited some variation in meaning and that a case might ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly a quantification of the amount. The postponement of the date of payment does not affect that accrual of income. The fact that the amount of income is not subsequently received by the assessee would not also detract from or efface the accrual of the income, although non-receipt may, in appropriate cases, be a valid ground for claiming deduction (see Morvi Industries Ltd. v. CIT [1971] 82 ITR 835 (SC)). The above being the position, the income certainly accrued to the assessee by the retrospective operation. This is clearly spelt out from the order of the approval issued by the IATA. The Tribunal was, therefore, not justified in holding that it accrued only on the date of approval. Our answer to the question, therefore, is in the nega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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