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TMI Blog1963 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ested by the appellant Commissioner should not have been referred. We, therefore, set aside the judgment of the High Court and make an order that the Tribunal do state a case and refer the question mentioned earlier to the High Court for its decision. Appeal allowed. - - - - - Dated:- 26-11-1963 - Judge(s) : A. K. SARKAR., M. HIDAYATULLAH., J. C. SHAH JUDGMENT The judgment of the court was delivered by SARKAR J.---We think this appeal must be allowed. It is directed against the judgment of the High Court of Punjab refusing the appellant's application under section 66(2) of the Income-tax Act, 1922, for an order directing the Income-tax Appellate Tribunal to refer the following question to the High Court for its decision : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding in the High Court of Punjab. In its return for the relevant assessment year the assessee appended the following note : " According to the assessee there is a profit of Rs. 1,09,072 .... The assessee has filed a suit for Rs. 75,000 ..... Unless the suit is decided the exact amount of profit cannot be determined and the liability admitted by the company. " By the words " the company " was meant the purchaser. It is not in dispute that the account of the assessee was kept on the mercantile basis. The Income-tax Officer held that the pendency of the appeal and the dispute between the assessee and its purchaser did not prevent the income from having accrued. He held that what was relevant was whether the transaction had been settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination has been made. Even if it were a question of law, the answer to such is, in our opinion, so obvious, that we would not like to waste the time of the court by making a reference of this kind. " The Commissioner then moved the High Court under section 66(2) but there also he failed. Mahajan J. observed : " No amount can be said to accrue unless it is actually due. Claim to an amount is not tantamount to an amount being due... If the appeal goes against the assessee, then nothing would be due. It is only if it goes in his favour that the amount will accrue. " It seems to us obvious that what the learned judge was doing was really to answer the question which he had been asked to direct the Tribunal to refer to the High Court. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the court was interpreting an agreement. The court was not concerned with the question whether, in such circumstances as obtained in the present case, the income can be said to have accrued. The court held that the agreement which the parties had made prevented the income from accruing and a mere book entry would not amount to an accrual of income. We find no reason why the question suggested by the appellant Commissioner should not have been referred. We, therefore, set aside the judgment of the High Court and make an order that the Tribunal do state a case and refer the question mentioned earlier to the High Court for its decision. The appellant will get the costs here and below. Appeal allowed. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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