BHIM SEN KHOSLA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This reference under the Indian I.T. Act, 1922, related to the assessment year 1961 -62, for which the previous year ended on March 31, 1961. During the above previous year the assessed, Bhim Sen Khosla, received a sum of Rs. 30,819 by way of interest on U. P. Zamindari Abolition Bonds held by him. The interest was payable annually but there was some litigation and, Therefore, the interest was not paid from year to year, but eight installments were paid together in the year which ended on March 31,1961. The assessed claimed that only the eighth installments which became due to him on July 1, 1960, could be included for assessment in the assessment year 1961 -62 and that the earlier installments could not be so included. This contention was, however, rejected by the ITO, by the AAC and by the Appellate Tribunal, and hence this reference at the instance of the assessed.

(2.) One more fact that remains to be mentioned, as some emphasis has been laid upon it, is that when the assessed received the sum of Rs. 30,819 on March 14, 1961, the filed the revised returns of income on October 21, 1961, for the assessment years 1957 -58 to 1960 -61 showing in each return the annual accrual of interest as attributable to the said period and claiming adjustment of tax deducted at source in respect of each of these years. On March 29,1962, the ITO completed these assessments including therein the proportionately accrued interest and giving credit for the tax deducted at source.

(3.) In view of the above situation the question of law which has been referred to this court is in the following terms :