{"id":13779,"date":"1971-08-11T00:00:00","date_gmt":"1971-08-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-chunilal-v-mehta-and-sons-p-ltd-on-11-august-1971"},"modified":"2015-01-28T04:48:35","modified_gmt":"2015-01-27T23:18:35","slug":"commissioner-of-income-tax-vs-chunilal-v-mehta-and-sons-p-ltd-on-11-august-1971","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-chunilal-v-mehta-and-sons-p-ltd-on-11-august-1971","title":{"rendered":"Commissioner Of Income Tax … vs Chunilal V. Mehta And Sons (P) Ltd on 11 August, 1971"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Commissioner Of Income Tax … vs Chunilal V. Mehta And Sons (P) Ltd on 11 August, 1971<\/div>\n
Equivalent citations: 1972 AIR 268, \t\t 1972 SCR (1) 117<\/div>\n
Author: K Hegde<\/div>\n
Bench: Hegde, K.S.<\/div>\n
           PETITIONER:\nCOMMISSIONER OF INCOME TAX BOMBAYCITY\n\n\tVs.\n\nRESPONDENT:\nCHUNILAL V. MEHTA AND SONS (P) LTD.\n\nDATE OF JUDGMENT11\/08\/1971\n\nBENCH:\nHEGDE, K.S.\nBENCH:\nHEGDE, K.S.\nGROVER, A.N.\n\nCITATION:\n 1972 AIR  268\t\t  1972 SCR  (1) 117\n 1971 SCC  (3) 587\n CITATOR INFO :\n RF\t    1991 SC 686\t (16)\n RF\t    1991 SC 999\t (14)\n\n\nACT:\nIncome-tax  Act, 1922, s. 10 (5-A)-Compensation received  on\ntermination of managing agency taxable under section-Section\nenacted by Finance Act, 1955--Managing Agency terminated  on\nApril  23, 1951-Suit for compensation under agreement  filed\nby managing agents-Compensation amount as determined by High\nCourt received by managing agents in December  1955-Managing\nagents maintaining accounts on mercantile basis-Compensation\namount when falls due? -Whether taxable in assessment  year\n1956-57.\n\n\n\nHEADNOTE:\nThe  assessee held the managing agency of a  public  limited\ncompany Under the agreement the assessee was to continue  as\nmanaging agents for a minimum period of 21 years.  On  April\n23,  1951  the\tDirectors of the managed  company  passed  a\nresolution  terminating\t the  services of  the\tassessee  as\nmanaging  agents.   This  resolution  was  affirmed  by\t the\nshareholders at their extraordinary general meeting held  on\nMay  23,  1951.\t There was dispute  about  the\tcompensation\npayable to the assessee.  In a suit filed by the latter\t the\ntrial  judge  as well as the Appellate Bench of\t the  Bombay\nHigh  Court held that under the terms of the  agreement\t the\nassessee  was  only entitled to liquidated  damages  at\t the rate\nof Rs. 6000 per month for the unexpired period of  the\nagency\tnamely\t3 years 2 months and 7 days.  The  suit\t was\ndecreed\t for  Rs.  2,34,000 on November\t 17,  1955  and\t the\nassessee received the amount in December 1955.\tThe assessee\ncontended   before  the\t Income-tax  Officer  that   as\t  it\nmaintained accounts on the mercantile system and the  amount\nhad  become due in 1951 the same could not be taxed  in\t the\nassessment  year 1956-57 under s. 10,(5A) of the  Income-tax\nAct, 1922.  Before the said section was introduced into\t the\nAct  by\t the  Finance Act,  1955  compensation\treceived  on\ntermination  of a managing agency was treated as  a  capital\nreceipt;  after\t its  enactment\t such  compensation   became\ntaxable\t as income.  The section was not  retrospective,  so\nthat  if  the assessee's plea that the\tcompensation  amount\naccrued\t in  1951 was accepted it could not  be\t treated  as\nincome\tat  all.  The Income-tax Officer and  the  Appellate\nAssistant  Commissioner\t rejected the  plea.   The  Tribunal\nhowever held that on the facts and circumstances of the case\nthe  compensation  became due to the assessee on  April\t 23,\n1951  and  therefore it could not be brought to tax  in\t the\nassessment  year 1956-57.  The High Court in reference\theld\nthat  the  amount was not taxable but the  interest  thereon\ncould be taxed in 1956-57.  The Revenue appealed.\nHELD:\t  (i) It was rightly held by the High Court that the\nassessee  was  entitled under the  agreement  to  liquidated\ndamages at the rate of Rs. 6,000 per month for the unexpired\nperiod of the managing agency.\n118\nAs  such the assessee's right to get the compensation  arose\non  April  23,\t1951 when  the\tresolution  terminating\t the\nmanaging agency was passed. [123A-B]\n(ii) Section  10 (5A) refers to 'payment due  or  received'.\nThe  expression\t 'due  to' refers  to  those  assessees\t who\nmaintain  their accounts according to the mercantile  system\nof  accountancy and the expression received by'\t applies  to\nthose  assessees who adopt the cash system  of\taccountancy.\nSince  the  assessee  in the  present  case  maintained\t the\nmercantile system of accounting the relevant assessment year\nfor  the  compensation accruing on April 23,  1951  was\t the\nsucceeding assessment year. [123 C-D, H]\nCommissioner of Income-tax, Madras V. A. Gajapathy Naidu,<\/a> 53\nI.T.R. 114, applied.\n(iii)\t  The  plea on behalf of the Revenue that the  right\nto get the amount arose when the quantum of compensation was\ndetermined  by the High Court, could not be  accepted.\t The\nfact  that  the assessee was claiming an exorbitant  sum  to\nwhich it was not entitled would not convert its right into a\ncontingent right. [124 E-G]\nThiagaraja  Chettiar  & Co. v. Commissioner  of\t Income-tax,\nMadras,<\/a> 51 I.T.R. 393 and F. E. Hardosstle & Co. (P) Ltd. v.\nCommissioner  of Income-tax, Bombay City 1, 47\tI.T.R.\t394,\napproved.\n(iv) The plain and unambiguous words of s. 10 (5A) which had\nbecome\tan integral part of the Act, lent no support to\t the\nplea that by a legal fiction the compensation must be deemed\nto have accrued to the assessee in December 1955.  The\tfact\nthat  the assessee included the receipt in question  in\t its\nprofit\tand  loss  account in the year\t1955  was  a  wholly\nimmaterial circumstances.  That circumstance did not  afford\nany basis for the argument that for this particular  receipt\nthe  assessee  adopted a different  system  of\taccountancy.\nObviously  the\tentry was delayed because  of  the  dispute.\nWhat  is  relevant is the method of accounting and  not\t the\nactual entries. [125E-G]\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1535  of
\n1968.\n<\/p>\n
Appeal\tby special leave from the judgment and\torder  dated
\nMarch  1,  1967\t of  the Bombay\t High  Court  in  Income-tax
\nReference No. 52 of 1962.\n<\/p>\n
appellant.\n<\/p>\n
M.   C. Chagla, A. K. Verma, J. B. Dadachanji, O. C.  Mathur
\nand Ravinder Narain, for the respondent.\n<\/p>\n
The Judgment of the Court was delivered by
\nHegde,\tJ.  In this appeal by special leave,  the  questions
\nthat arise for decision relate to the taxability under S. 10
\n119<\/span>
\n(5A) of the Indian Income-tax Act, 1922 (in brief ‘the Act’)
\nof a certain amount received by the assessee firm as compen-
\nsation on the termination of its managing agency.
\nThe  assessee  is  a  Private Limited  Company\tand  at\t the
\nrelevant time,, it was under voluntary liquidation.  It\t was
\nincorporated  in  June\t1945  by  converting  an   erstwhile
\npartnership  firm  into\t a  Private  Limited  Company.\t The
\npartnership   firm  had\t entered  into\ta  managing   agency
\nagreement  on  June 15,1933 with a  Public  Limited  Company
\ncalled\t“The  Century Spinning and Manufacturing  Co.  Ltd.”
\nUnder  the said agreement, the assessee was to\tcontinue  as
\nmanaging  agents  for  a  minimum period  of  21  years\t and
\nthereafter until that firm chose to resign its office or  is
\nremoved\t from  office by the managed  company.\t During\t the
\nperiod of 21 years stipulated in the agreement, the  managed
\ncompany\t had no right to remove the managing firm  from\t its
\noffice\texcept\tfor  reasons mentioned\tin  the,  agreement.
\nDuring\tthe  period  the assessee continued to\tact  as\t the
\nmanaging  agents the agreement provided, that  the  managing
\nagents\twill  get a minimum remuneration of  Rs.  6,000\/-  a
\nmonth  and if its remuneration is found at the close of\t the
\nyear to be less than 10 per cent of the gross profit of\t the
\ncompany,  the  managing\t agents were to be  paid  a  further
\nadditional  sum to make the aggregate remuneration  received
\nby it equal to 10 percent of the gross profit of the company
\nfor  that year.\t The Agreement further provided that if\t the
\nmanaging agents’ services were terminated before the  period
\nof  21 years stipulated in the agreement except for  reasons
\nmentioned in clause 15 of the agreement the managing agents
\nwould  be  entitled to receive from the managed\t company  as
\ncompensation  or liquidated damages for the loss  of  office
\nthe sum mentioned in clause 14 of the agreement.
\nIn about April 1951, a large holding of the managed  company
\nwas acquired by a group of shareholders who were hostile  to
\nthe  managing agents.  Thereafter the  relationship  between
\nthe managing agents and the managed company became strained.
\nOn  April  23, 1951, the Directors of  the  managed  company
\npassed a resolution terminating the services of the assessee
\nfirm  as managing agents.  This resolution was\taffirmed  by
\nthe shareholders at their extraordinary general meeting held
\non May 23, 1951 In
\n9-M 1245 SupCI\/71
\n120<\/span>
\npursuance of the resolution, the Board of Directors on April
\n23, 1951, a notice of termination of the managing agency was
\nissued\tto  the\t managing agents.   In\treply  the  assessee
\n,claimed  compensation\tof  Rs. 50  lacs  for  the  unlawful
\ntermination  of its services.  But the managed\tcompany\t was
\nprepared  to pay Rs. 2,34,000\/- as compensation\t calculating
\nthe  compensation at Rs. 6,000\/- a month for  the  unexpired
\nperiod of the agency  i. e. 3 years 2 months and 7 days\t and
\nRs.  4600\/- as remuneration for the 23 days of\tApril  1951.
\nThe assessee refused to accept that amount.  Thereafter\t the
\nassessee  sued the managed company on the original  side  of
\nthe  Bombay  High Court claiming a sum of Rs.  28  lakhs  as
\ncompensation  for the unlawful termination of its  services.
\nThe  managed  company  resisted that  suit.   The  suit\t was
\ndecreed\t on November 17, 1955 in the sum of  Rs.  2,34,000\/-
\nand that decree was affirmed in appeal.\t The trial judge  as
\nwell as the appellate Bench held that under the terms of the
\nagreement  the\tassessee  was only  entitled  to  liquidated
\ndamages\t at  the  rate\tof Rs. 6,000\/-\tper  month  for\t the
\nunexpired  term\t of its agency.\t The assessee  received\t the
\namount decreed in December, 1955.\n<\/p>\n
Till the insertion of S. 10 (5A) into the Act by the Finance
\nAct  of\t 1955 (Act 15 of 1955), compensation received  by  a
\nmanaging  agent\t for  the  termination\tof  his\t agency\t was
\nconsidered  as\ta capital receipt, but S. 10  (5A)  provided
\nthat any compensation or other payment due to or received by
\na  managing agent of an Indian Company at or  in  connection
\nwith the termination or modification of his managing  agency
\nagreement with the company shall be deemed to be profits and
\ngains  of a business carried on by the managing\t agent,\t and
\nshall  be liable to tax accordingly.  This provision is\t not
\nretrospective in operation.\n<\/p>\n
As  seen  earlier,  the\t compensation  with  which  we\t are
\nconcerned in this case was received by assessee in December,
\nIn  the\t assessment  year 1956-57,  the\t Income-tax  Officer
\noverruling the objections of the assessee included the\tsaid
\namount as the profits of the business of the assessee during
\nthe  previous year.  Admittedly the assessee maintained\t its
\naccounts according to mercantile system of accountancy., The
\nassessee’s contention before the Income-tax Officer that the
\nreceipt in question cannot be brought
\n121<\/span>
\nto  tax in the assessment year 1956-57 as it became  due  in
\n1951 was rejected by the Income-tax Officer.  In appeal\t the
\nAppellate Assistant Commissioner agreed with the view  taken
\nby the Income-tax Officer.  He opined that the amount became
\ndue  to\t the assessee only when it was decreed by  the\tHigh
\nCourt  on November 17, 1955 and therefore it was  assessable
\nin  the assessment year 1956-57.  But on a  further  appeal,
\nthe Tribunal held that on the facts and in the circumstances
\nof the case, the compensation in question became due to\t the
\nassessee  on  April 23, 1951 and therefore it could  not  be
\nbrought\t to  tax  in the assessment year  1956-57.   At\t the
\ninstance  of the Commissioner, the Tribunal submitted  under
\ns. 66 (1) of the Act, the following two questions of law for
\nthe opinion of the High Court
\n\t      “1.   Whether   on  the  facts  and   in\t the
\n\t      circumstances  of this case  the\tcompensation
\n\t      for termination of the managing agency accrued
\n\t      to the assessee on 23rd April 1951 ?\n<\/p>\n
\t      2.    Whether   on  the  facts  and   in\t the
\n\t      circumstances
\n\t      of   this\t  case\tthe  compensation   of\t Rs.\n<\/p>\n
\t      2,34,000\/and  interest  thereon  was   taxable
\n\t      under s. 10 (5A) of the Indian Income-tax Act,
\n\t      in the assessment year 1956-57?”\n<\/p>\n
The   High  Court  answered  the  first\t question   in\t the
\naffirmative and the second question as follows :
\nThe  amount  of compensation of Rs. 2,34,000\/- will  not  be
\nliable\tto tax, but the amount of- interest thereon will  be
\ntaxable\t under\ts. 10,(5A) in the  assessment  year  1956-57
\nAggrieved by that decision, the Commissioner of\t Income-tax,
\nBombay City has brought this appeal.\n<\/p>\n
We  shall  first  address ourselves to the  question  as  to
\nwhether on the facts and in the circumstances of this  case,
\nthe  compensation  for termination of  the  managing  agency
\naccrued\t to the assessee on April 23, 1951 ? The  answer  to
\nthis  question depends upon the true effect of the terms  of
\nthe  agreement between the managing agents and\tthe  managed
\ncompany.   There is no dispute that the termination  of\t the
\nmanaging  agency did not fall within the scope of clause  15
\nof  the\t agreement which provides that\tthe  managing  agent
\nshall not be entitled to receive from the company
\n122<\/span>
\nany compensation for the loss of the office of Agents to the
\ncompany if such loss arises from any of the causes mentioned
\ntherein.   It is clear-that was also the view taken  by\t the
\nHigh  Court  in the suit filed by the assessee\tagainst\t the
\nmanaged\t company-that  the,  assessee was  entitled  to\t get
\ncompensation under clause 14 of the agreement.\tThat  clause
\nprovides :\n<\/p>\n
\t      “In  case\t the firm shall be deprived  of\t the
\n\t      office  of  Agents  of the.  company  for\t any
\n\t      reason  or  cause other than or  except  those
\n\t      reasons or causes specified in clause  fifteen
\n\t      of  these presents the firm shall be  entitled
\n\t      to receive from the Company as compensation or
\n\t      liquidated  ‘damages  for\t the  loss  of\tsuch
\n\t      appointment  a  sum  equal  to  the  aggregate
\n\t      amount of the monthly salary of not less\tthan
\n\t      Rupees six thousand, which the Firm would have
\n\t      been entitled to receive from the company\t for
\n\t      and  during  the whole of the  then  unexpired
\n\t      portion of the said period of twenty one years
\n\t      if  the said Agency of the Firm had  not\tbeen
\n\t      determined.”\n<\/p><\/blockquote>\n
In  the\t suit  filed by the  assessee  against\tthe  managed
\ncompany,  the  only  controversy  between  the\tparties\t was
\nwhether\t that clause should be read alongwith clause  10  of
\nthe agreement which provided for the payment of remuneration
\nto  the\t managing  agents  during  the\tcontinuance  of\t the
\nManaging  agency  agreement  or\t whether  the\tcompensation
\npayable\t should be determined solely on the basis of  clause\n<\/p>\n
14.   Replying on the expression “not less than Rs.  6000\/-”
\nin  clause  14,\t the assessee  contended  that\tRs.  6,000\/-
\nreferred  to  in the clause is merely the  minimum  but\t the
\nactual\tcompensation  should  be determined  in\t the  manner
\nprovided  in  clause  10.   The\t High  Court  rejected\tthat
\ncontention.  According to the High Court clause 14 not\tonly
\nprovided for the payment of damages for improper termination
\nof  the\t services  of  the  managing  agents  but  it\talso
\nstipulated  the damages to which they were entitled to.\t  In
\nits opinion that clause had quantified the damages to  which
\nthe  managing agents were entitled to.\tIt opined  that\t the
\ndamages\t payable  to  the  assessee  firm  were\t  liquidated
\ndamages., The High Court further held that the
\n123<\/span>
\nexpression “not less than Rs. 6,000\/-” means a definite\t sum
\nof  Rs.\t 6,000\/-, neither more nor less.  We are  in  entire
\nagreement  with\t the view taken by the High  Court  in\tthat
\nsuit.\tIt  is plain from the language of clause 14  of\t the
\nagreement  that the assessee was entitled to a definite\t sum
\nunder that clause.  In other words it was entitled to liqui-
\ndated damages.\tHence we agree with the answer given by\t the
\nHigh Court to the first question referred to earlier.
\nNow  coming to the second question, the answer to  the\tsame
\ndepends upon the interpretation to be placed ,on s. 10 (5A).
\nEarlier\t we  have  set\tout that  provision  to\t the  extent
\nnecessary  for our present purpose.  That section  takes  in
\n“Payment  due to or received”.\tIn the matter  of  payments,
\nthere are two aspects viz. (1)payments due and (2)  payments
\nreceived.   The mercantile system of accountancy takes\tnote
\nof  “payments  due”  whereas  cash  system  ,of\t accountancy
\nrecognises  only  payments received.  Mercantile  system  of
\naccountancy,  a\t double entry system is\t maintained  on\t the
\nbasis of accrual of rights to receive or liability to pay  a
\ncertain\t sum of money, unlike is the case of cash system  of
\naccountancy  which merely takes note of actual\treceipts  or
\ndisbursements.\n<\/p>\n
We  have  earlier,  come to the\t conclusion  that  the\tcom-
\npensation  with which we are concerned in this\tcase  became
\ndue  to\t the assessee in April 1951 though it  was  actually
\nreceived  by the assessee in December 1955.  Now arises\t the
\nquestion to what circumstance the expression “due to” in  s.
\n10  (5A)  applies and to what  circumstance  the  expression
\n“received” therein is applicable?  They do not mean the same
\nthing.\t Our  income-tax  law is  familiar  with  these\t two
\nexpressions.  That law permits an assessee to adopt his\t own
\nsystem of accountancy subject to certain conditions and\t his
\ntax  liability is determined on the basis of the  system  of
\naccountancy adopted by him.  In other words, the Act permits
\nthe  assessee  to  adopt either\t the  mercantile  system  of
\naccountancy  or the cash system of the accountancy  and\t the
\nsystem adopted by him would be the basis on which he  should
\nbe assessed.  It is not necessary in this case to deal\twith
\nthe  exceptions to that rule.  We have to read, s.  10\t(5A)
\nalongwith  the other provisions in the Act.  If so read,  it
\nis cleat that the expression “due to” in that section refers
\nto those assessees who maintain their accounts
\n124<\/span>
\naccording  to the mercantile system of accountancy  and\t the
\nexpression  “received  by” applies to  those  assessees\t who
\nadopt  the cash system of accountancy.\tAs observed by\tthis
\nCourt in Commissioner of Income-tax, Madras v. A.  Gajapathy
\nNaidu<\/a> (1):\n<\/p>\n
\t      “When   an  Income-tax  Officer  proceeds\t  to
\n\t      include a particular income in the assessment,
\n\t      he   should  ask\thimself,  inter\t alia,\t two
\n\t      questions,  namely: (1) what is the system  of
\n\t      accountancy adopted by the assessee, and\t(ii)
\n\t      if  it is the mercantile system,\tsubject\t ‘to
\n\t      the deeming provisions, when has the right  to
\n\t      receive\taccrued.    If\the  comes   to\t the
\n\t      conclusion that such a right accrued or  arose
\n\t      to  the  assessee in a  particular  accounting
\n\t      year, he should include the said income in the
\n\t      assessment of the succeeding assessment year.”\n<\/p><\/blockquote>\n
Herein\talso we have to ask ourselves the question,  bearing
\nin  mind the fact that the system of accountancy adopted  by
\nthe  assessee  is  the mercantile system,  as  to  when\t the
\nassessee’s  right  to get the compensation arose.   We\thave
\nalready held that it arose in April 1951.\n<\/p>\n
It  was\t urged\ton behalf of the  Department  that  as the
\nassessee  disputed the quantum of compensation to  which  it
\nwas entitled, we must hold that its right to get the  amount
\narose  when that dispute was determined by the\tHigh  Court.
\nWe  are unable to accede to this contention.   As  mentioned
\nearlier,  the right of the assessee to get compensation\t for
\nunlawful  termination  of its services and  the\t quantum  of
\ncompensation  to  which it was entitled were  clearly  pres-
\ncribed\tin the agreement.  It was also so held by  the\tHigh
\nCourt  in  the\tsuit between the assessee  and\tthe  managed
\ncompany.   The\tfact that the assessee was claiming  an\t ex-
\norbitant  sum  to,  which it was not entitled  to  will\t not
\nconvert\t its right into a contingent right.   In  Thiagaraja
\nChettiar & Co. v. Commissioner of Income-tax, Madras<\/a>(2)\t the
\nHigh  Court  of Madras held that where a managing  agent  is
\nentitled under the terms of the managing agency agreement to
\nremuneration  at  a  certain percentage on  the\t annual\t net
\nprofits\t of  the company, the remuneration  payable  to\t the
\nmanaging agent accrued when the net pro-fits
\n(1) 53 I.T.R. 114.\t\t      (2) 51.  I.T.R. 393,
\n125<\/span>
\nof the company for the year are ascertained.  The mere\tfact
\nthat owing to disputes between the company and the  managing
\nagent  the company had not credited the managing agent\twith
\nthe  remuneration due to the latter in its  accounts,  would
\nnot   entitle\tthe  managing  agent  to  claim\t  that\t the
\nremuneration  due to him had not accrued and should  not  be
\nassessed to income-tax until the company had credited him in
\nits  accounts with the amount of commission due to him.\t  We
\nare  in agreement with the ratio of that decision  and\tthat
\nratio governs the facts of the president case.
\nThe ratio of the decision of the Bombay High Court in F.  E.
\nHardosstle  & Co. (Private) Ltd. v. Commissioner  of  Income
\nTax, Bombay City-1(1), is also to the same effect.
\nIt  was next urged on behalf of the Department- that  s.  10
\n(5A)  is  a code in itself and in  applying  the  provisions
\ntherein,  no  reliance\tshould be placed on  the  system  of
\naccountancy  which  the assessee generally adopts.   It\t was
\nfurther\t urged that as the liability under s. 10 (5A)  is  a
\nnew liability and as the receipt with which we are concerned
\nwas  received  in  December,  1955, after  s.  10  (5A)\t was
\nincorporated  into the Act, we must by a legal fiction\tdeem
\nthat  the amount became due only in December, 1955.  We\t see
\nno  basis for this argument.  The language of s.10  (5A)  is
\nplain  and  unambiguous.  That provision has now  become  an
\nintegral  part\tof the Act.  Therefore\tthe  deemed  payment
\nunder that provision stands on the same footing as any other
\npayment.  The fact that the assesses included the receipt in
\nquestion in its profit and loss account in the year 1955  is
\na  wholly immaterial circumstance.  That  circumstance\tdoes
\nnot  afford  any  basis\t for  the  argument  that  for\tthis
\n‘particular receipt, the assessee adopted a different system
\nof  accountancy.  Obviously because of the  dispute  between
\nthe  assessee and the managed company, the assessee did\t not
\nenter the amount in question in the year in which it  became
\ndue.   Method of maintaining accounts is one thing  and\t the
\nactual\tentries\t in the accounts maintained is\ta  different
\nthing.\t What is relevant is the method of  accountancy\t and
\nnot the actual entries.\n<\/p>\n
(1)  47 I.T.R. 394.\n<\/p>\n
126<\/span><\/p>\n
For  the reasons mentioned above, we agree with the  answers
\ngiven by the High Court to the questions of law referred  to
\nit.  This appeal is accordingly dismissed, with costs.\n<\/p>\n
G.C.\t\t\t\t\tAppeal dismissed.\n127<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Commissioner Of Income Tax … vs Chunilal V. Mehta And Sons (P) Ltd on 11 August, 1971 Equivalent citations: 1972 AIR 268, 1972 SCR (1) 117 Author: K Hegde Bench: Hegde, K.S. PETITIONER: COMMISSIONER OF INCOME TAX BOMBAYCITY Vs. RESPONDENT: CHUNILAL V. MEHTA AND SONS (P) LTD. DATE OF JUDGMENT11\/08\/1971 BENCH: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-13779","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nCommissioner Of Income Tax ... vs Chunilal V. 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