1989 (1) TMI 89

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..... Act, 1961, filed by the assessee. The assessee-firm is engaged in the business of distribution of cinema films. As per an agreement dated October 4, 1977, the assessee advanced Rs. 3,85,000 by way of deposit to the producers. By clause 19 of the agreement, the assessee was to be paid a commission of 25% of the net realisation of the picture and this commission had to be deducted from the monthly .....

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..... sation as commission and the amount of the commission had accrued to the assessee as soon as the realisations were made. In that view of the matter, the assessee's income as commission was brought to tax amounting to Rs. 51,012. The assessee appealed to the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) held that the amount had been rightly brought to tax by the Inc .....

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..... of the Income-tax Act. We heard counsel for the petitioner as well as the Revenue. Admittedly, the assessee is following the mercantile system of accounting. 25% of the net realisations of each month accrued to the assessee. The Tribunal only followed the decision of the Supreme Court in E. D. Sassoon and Co. Ltd. v. CIT [1954] 26 ITR 27. There is no case that the amount advanced is unrealisable .....

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