COMMISSIONER OF INCOME TAX Vs. YATINDRA AND CO

JUDGEMENT

(1.) At the instance of the Revenue, the Income Tax Appellate Tribunal, Allahabad has referred the following questions of law under section 256 (1) of the Income Tax Act, 1961, hereinafter referred to as "the Act" for opinion to this Court for the assessment year 1979-80. "1. Whether on the facts and in the circumstances of the case the Hon'ble HAT was correct in law in holding that no income has accrued to the assessee on account of decretal amount?

(2.) Whether on the facts and circumstances of the case, the Hon'ble 1TAT was correct in law in deleting the addition of Rs, 75,043/- by holding that the receipt of the decretal amount could not be said to be revenue receipt and assessable in the year under consideration till the finality of the litigation?" 2. The brief facts of the case are as follows:

(3.) The assessee opposite party (hereinafter referred to as "the assessee") is san exporter and assessed to tax in the status of registered firm and followed merchandile system of accountancy in this case the Civil Judge, Farrukhabad had by an order dated 14.12.1977 passed the decree against the Insurance Company for a sum of Rs, 1, 55,003/- in favour of the assessee. Against the said decree appeal was filed which was pending in the Hon'ble High Court. As the matter was still subjudice the assessee did not show an amount of decree as his income during the assessment year, The assessing officer did not accept the contention of the assessee and treating the amount on accrual basis as the income of the assesses: added the said amount of decree towards damage of potatoes amounting to Rs. 75, 043/- which was not allowed for the year 1973-74when the damage had actually taken place Assessee, being aggrieved filed an appeal before the Commissioner of Income fax (Appeal), who has confirmed the addition.