- (1.) THE following question is referred for the opinion of this court by the Income-tax Appellate Tribunal for the assessment year 1976-77 for which the accounting year ended on January 31, 1976 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the deletion of Rs. 52,632 from the total income of the assessee ?"
(2.) THE facts as gleaned from the statement of the case are that in Part III of its return, the assessee-firm disclosed an amount of Rs. 52,631.77, which was claimed to be exempt. THE particulars of this amount, as disclosed in Part III of the return, are as follows : "Potato rent kept in reserve as per the High Court's order in Writ Petition No. 11066 of 1975 against the Cold Storage Regulation Ordinance, 1975, of the Uttar Pradesh Government." The Tribunal stated in para 3 of the statement of case that it appears that the assessee had charged storage charges for potatoes stored in February, 1975, at Rs. 15 per quintal. On October 6, 1975, the Government of Uttar Pradesh issued a notification under the provisions of the Uttar Pradesh Regulation of Cold Storage Ordinance, 1975, fixing the maximum storage charges at Rs. 12.50 per quintal for the season 1975, i.e., up to October, 1975. The validity of the said notification was challenged by the owners of some of the cold storages before this court and then this court passed interim orders allowing the petitioners to charge the contractual rate at Rs. 15 per quintal, but directed them to keep the difference of Rs. 12.50 per quintal and Rs. 15 per quintal in a separate account within three days of the realisation, which was to be pledged with the District Magistrate. The difference amount in the case of the assessee came to Rs. 52,632, The assessee did not include this amount in its gross receipts and transferred the same to the Potato Rent Reserve Account. The assessee claimed that the said amount was not includible in its income. The assessing authority rejected the contention of the assessee and brought the amount of the reserve account to tax in the hands of the assessee.
(3.) ON appeal, the Appellate Assistant Commissioner observed that though the assessee had collected the amount, yet it had not become legally entitled to receive that income. The Appellate Assistant Commissioner held that no such income could be said to have accrued or arisen to the assessee during the assessment year 1976-77. He, therefore, deleted the addition of Rs. 52,632. On further appeal, the Appellate Tribunal upheld the order of the Appellate Assistant Commissioner.;