TMI Blog1989 (6) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. The respondent is the Revenue. The matter relates to the assessment year 1975-76. The previous year ended on March 31, 1975 The applicant-assessee is a firm. It is carrying on the business of manufacture of transmission towers and lines for the Kerala State Electricity Board. It entered into four different contracts with the Electricity Board in 1963. There were disputes between the Board and the assessee. The Board filed four suits for compensation for breach of contract. Three of them were dismissed. In the last suit, the assessee had filed a counter-claim which related to payments outstanding in respect of towers manufactured and supplied by the assessee. Finally, the suit and the counter-claim were settled. The Board agreed to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,25,265 represented interest. The order passed by the Board, annexure-D, dated December 11, 1974, states that the dispute between the assessee and the Board is settled and sanction is accorded for paying out of court Rs. 10,15,585 with 4% "interest" from June 3, 1969, till the date of payment. The receipt dated December 20, 1974, available at page 25 of the paper book, shows that the assessee received the entire amount in final settlement of all claims including compensation and "interest" claims. The Appellate Tribunal found that the amount was paid only as a result of the settlement arrived at between the parties. In paragraph 13 of the order, the Appellate Tribunal states that though the original agreement between the assessee and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It should be stated that the amount became due and payable only as per the order of the Board dated December 11, 1974, annexure-D. As a result of the agreement between the assessee and the Board, annexure-D orders of the Board, dated December 11, 1974, ensued. The right of the assessee to receive the amount sprang into existence only during the accounting period relevant to the assessment year 1975-76. In such circumstances, the entire amount was rightly held to be taxable for the assessment year 1975-76. We answer question No. 2 in the affirmative, against the assessee and in favour of the Revenue. A copy of this judgment under the seal of this court and the signature of the Registrar will be forwarded to the Income-tax Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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