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TMI Blog1996 (8) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... n holding that the date of accrual of compensation amount is March 30, 1979, and not September 14, 1979 ? (2) Whether, under the facts and circumstances of the case, the Tribunal did not err in facts as well as in law in holding that the assessee is an industrial company ? (3) Whether, on the facts and circumstances of the case, the Tribunal was correct in holding that the assessment for the assessment year 1980-81 completed on March 23, 1984, on the basis of the return of income submitted on March 23, 1983, was not barred by limitation ? (4) Whether, on the facts and circumstances of the case, the Tribunal was correct in holding that the amounts receivable by the assessee in accordance with arbitration award relating to execution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not liable to be assessed in the assessment year 1980-81. However, the Assessing Officer did not accept the contention of the assessee-company. According to the Assessing Officer, the awarded amount accrued to the assessee-company not on March 30, 1979, that is, the date on which the Delhi High Court gave the decision against the arbitration award but on September 14, 1979, when the actual compensation money along with interest was received by the assessee-company. The Assessing Officer also did not accept the claim of the assessee-company that the compensation was a capital receipt and, therefore, it was exempted from tax. The assessee-company further claimed allowance under section 80J of the Act taking it to be an "industrial compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon failure to do so the assessee-company had to supply those materials by paying money. When the amount was claimed by the assessee-company it was disputed by the Department. This led to a reference to an arbitration proceeding in terms of the contract. In the arbitration proceeding, the arbitrator awarded the compensation holding that when the assessee-company spent the amount it was entitled to receive the same amount. The matter was taken up to the Delhi High Court and ultimately the Delhi High Court confirmed the award given by the arbitrator in the arbitration proceeding. Mr. Joshi has strenuously argued that the date on which the amount was received was the date of income of the assessee-company. Dr. Saraf, has disputed the same. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date". The apex court after discussing the entire aspects of the matter held thus : " The dictionary meaning of the word 'accrue' is 'to come as an accession, increment, or produce : to fall to one by way of advantage : to fall due'. The income can thus be said to accrue when it becomes due. The postponement of the date of payment has a bearing only in so far as the time of payment is concerned, but it does not affect the accrual of income. The moment the income accrues, the assessee gets vested with the right to claim that amount even though it may not be immediately. " In the said decision, the apex court also held as under : "It is well known that the mercantile system of accounting differs substantially from the cash system of boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of manufacture of goods. The court observed thus : " Would any person who has constructed a dam say that he has manufactured an article or that he has produced an article ? Obviously not. If a dam is an article, so would be a bridge, a road, an underground canal and a multi-storeyed building. To say that all of them fall within the meaning of the word 'articles' is to overstrain the language beyond its normal and ordinary meaning. It is equally difficult to say that the process of constructing a dam is a process of manufacture or a process of production. It is true that a dam is composed of several articles ; it is composed of stones, concrete, cement, steel and other manufactured articles like gates, sluices, etc. But to say tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Central Act) or Regulation made after the commencement of this Act, it shall be sufficient, for the purpose of including the first in a series of days or any other period of time, to use the word 'from', and, for the purpose of including the last in a series of days or any other period of time, to use the word 'to'. " In Maxwell on the Interpretation of Statutes, Twelfth Edition, at page 309, it is stated as follows : " Where a statutory period runs "from" a named date 'to' another, or the statute prescribes some period of days or weeks or months or years within which some act has to be done, although the computation of the period must in every case depend on the intention of Parliament as gathered from the statute, generally the first ..... X X X X Extracts X X X X X X X X Extracts X X X X
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