TRIKAMLAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under Section 256(1) of the I.T. Act, 1961 hereinafter called the Act, the Income-tax Appellate Tribunal, Indore Bench, has referred the following questions of law to this court for its opinion:

(2.) WHETHER the Tribunal has correctly held in law that, on the facts and in the circumstances of the case, the profit of Rs. 24,000 accrued in the assessment year 1962-63 and not in the years 1944 to 1947 ?

(3.) NOW, it is well settled that in cases of claims for unliquidated damages, no debt is due until the amount is ascertained or admitted. In the instant case, the claim made by the assessee against the Nazarali Mills was in respect of unliquidated damages which were ascertained on 20th June, 1961, when the decree was passed in favour of the assessee. The right to receive the amount in question, therefore, accrued to the assessee on 20th June, 1961. In this connection, we may usefully refer to the following observations of the Supreme Court in CIT v. A. Gajapathy Naidu [1964] 53 ITR 114, 118: