9911796707
TMI Blog1988 (1) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... ot permitted to take or receive any amount over and above the charges fixed by the State Govt. under section 29 of that Act. During the year, the assessee raised the rate of storage to Rs. 18.50 per quintal whereas the charges fixed by the Govt. was Rs. 17 per quintal. The assessee's accounting year started on 1-2-82 and ended on 31-1-1983 for the year under consideration. In 1982, till July, the Govt. did not issue any order fixing the charges for the season which season fell in the previous year relevant to the year under consideration. On 30-6-1982, the Agricultural Production Commissioner, U.P., sent a direction to all the District Magistrates for persuading the cold storage owners not to charge a rate higher than Rs. 17 per quintal fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d initially credited to the rent account as trading receipt and that the assessee treated such receipt as revenue without any reservation for probable refund. He also was of the view that the Hon'ble High Court permitted to collect the entire amount as rent and therefore, the same has not only accrued or arisen but had also been received by the assessee during the year. He also did not agree with the assessee that the amount deposited with the District Magistrate was the revenue expenditure which would be admissible as deduction. 4. The assessee took up the matter before the CIT(A) and claimed that the amount was wrongly treated as income which had accrued to the assessee. The assessee relied on the decision of the Appellate Tribunal, 'A' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. 5. We have heard both the sides at length. The assessee's learned counsel reiterates the points of the assessee raised before the authorities below, more particularly in respect of the point that the assessee was not in control or in possession of the amount collected in excess as mentioned earlier. It is vehemently urged by him that the amount was collected on behalf of the Court as per its direction and such collected amount was handed over to the District Magistrate over which the assessee had no control whatsoever and, therefore, it was wrong to say that the amount was the trading receipt of the assessee or the income accrued to the assessee, particularly, when ultimately the writ petitions by the Petitioners concerned have been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to earlier as well as the decision of the Hon'ble High Court dated 7-10-1987 under which the writ petitions of the petitioners concerned were dismissed and a direction was given that the amount deposited with the District Magistrate should be disbursed to the cold storage hirers concerned. Whether the assessees had actually entered such income in the books in the year in which they accrued or not, was immaterial since what determines the liability to tax is the accrual of income and not the entry of such income in the books of account. For this proposition, we may refer to the decision of the Hon'ble Allahabad High Court in the case of CIT v. Motilal Padampat Sugar Mills Co. (P.) Ltd [1979] 118 ITR 825 in which the decision of the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compensation, which led to the meeting between the assessee and that authority, on 28-1-46, during which the amount of compensation was finally fixed. Thus it was held by the Hon'ble High Court that the amount became ascertained only on that date and, therefore, assessable for the assessment year 1946-47. In the case before us, the assessee was allowed to collect the entire amount as rent by the Hon'ble High Court as pointed out by the ITO in his order. But there is no indication that the assessee was permitted to receive such income. In fact, we do not find any material to say that the assessee has an enforceable right in respect of that excess amount collected by it at the direction of the Hon'ble High Court. It is also seen that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Hon'ble High Court to collect the entire amount as rent, would not convert such amount as income accrued or received or arisen to the assessee. In the case of CIT v. Babulal Narottamdas [1976] 105 ITR 721 at page 628 (Bom.), it was held on the facts of that case that a judgment and decree of a court would not normally create a right or liability in a party and the normal function of a court while adjudicating a dispute between two parties is to declare a right where there is a pre-existing right or to determine a liability where there is a pre-existing liability. It was also held that the right or liability may exist by itself and is not created by the judgment or decree of a court. 9. Mere posting of an entry would not supply concl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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