COMMISSIONER OF INCOMETAX Vs. DHRU PRASAD AGGARWAL

JUDGEMENT

(1.) HEARD the standing counsel as none appears on behalf of the assessee despite sufficient service having been made by the registered post. Under S. 256(1) of the IT Act, 1961 ('the Act'), the Tribunal has referred the following question relating to the asst. yr. 1975-76 to this Court for its opinion:

(2.) THE assessee, an HUF, derived income from purchase and sale of high speed diesel, lubricants and fertilizer. The selling price of fertilizer was raised by the Government w.e.f. 1st June,1974. The U.P. Government, however, issued an Ordinance to the effect that the fertilizers which the dealers possessed in the stock on 31st May,1974, would have to be sold to the consumers at the old rate. The said order was challenged by the dealers, who failed before the High Court. Then the fertilizer- dealers took up the matter to the Supreme Court which by an interim order allowed the dealers to sell the fertilizers at the new rate, provided the extra amount so realised was deposited by them in a separate account with the District Magistrate. Following the Supreme Court direction, the instant assessee deposited a sum of Rs.21,600 in the post office saving account and pledged the said amount or Rs. 21,600 in favour of District Magistrate, Deoria. Then the question arose whether the said amount could be included in the income of the assessee. The AAC and the Tribunal, both following the earlier decision of the Tribunal (Allahabad Bench) in the case of Govind Prasad Prabhu Nath (IT Ref. No.2186 (All) of 1975-76, dt. 26th March, 1977), held that the excess amount realised by the assessee pursuant to the interim order passed by the Supreme Court, did not belong to the assessee and, therefore, that could not be held to be the income of the assessee, unless the matter was finally decided by the Supreme Court. This is how deletion of the addition of Rs.21,600 ordered by the AAC was affirmed by the Tribunal for the year under consideration. The Tribunal in its order in the case of Govind Prasad Prabhu Nath (supra) which order it relied on, observed that the assessee would become entitled to this amount only if the order of the U.P. Government is struck down by the Supreme Court and till that contingency takes place, the assessee has no right to receive that amount. We quite agree with this reasoning of the Tribunal. Income could be held to be accrued only when the assessee acquired a right to receive that. In the instant case, the right of the assessee to receive the increased price of the fertilizer is dependent on the decision of the Supreme Court and the order of the U.P. Government having been struck down.

(3.) THE question is, accordingly, answered against the Revenue. No order as to costs.