COMMISSIONER OF INCOME TAX Vs. KALICHARAN JAGANNATH

JUDGEMENT

(1.) THE question referred for our opinion is :

(2.) ON some date falling within the previous year 1st April, 1945, to 31st March, 1946, the assessee entered into a contract to supply fruits and bullock carts for transport purposes to the military department. The supply had to be made at Chheoki and at Kanpur. The Kanpur trading account showed a loss of Rs. 13,164 on supplies of Rs. 1,84,583. Thereafter, under the terms of the agreement, the assessee submitted a petition to the military department for a review, whereupon the military authorities, on the 6th of November, 1947, sanctioned the payment of an additional sum of Rs. 72,637. This sum was actually paid to the assessee on the 17th of February, 1948 and the 24th of February, 1948. The question arose whether this sum of Rs. 72,637 could be included in the assessment of the income of the assessee for the previous year relevant to the assessment year 1946-47. The Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal concurrently held that this sum of money must be included in the assessment of the income for the assessment year 1946-47 because this sum was received by virtue of the agreement which had been entered into during the relevant previous year and the work under contract had also been carried out during the relevant previous year. The clause of the agreement, which was relied upon for arriving at this finding, reads as follows :

(3.) THE view, that we have taken above, follows the views expressed by the Supreme Court in E. D. Sassoon Co. Ltd. v. Commissioner of Income-tax, AIR 1954 SC 470. THEir Lordships of the Supreme Court in that case to consider the scope and meaning of the words income arising or accruing. Dealing with this question, their Lordships discussed the various vases in which this expression had came up for interpretation and reproduced the following quotation from the judgment of Mukherji, J., in Rogers Pyatt Shellac Co. v. Secretary of State for India, 1925 52 ILR(Cal) 1 :