- (1.) WE have heard the learned Counsel for the parties.
(2.) IN this reference under Section 256(2) of the Income -tax Act, 1961 for the assessment year 1989 -90, the following questions have been referred for the opinion of this Court: (i) Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Commission for the period 1 -7 -1988 to 31 -3 -1989 accrued to the assessee in the previous year relevant to the assessment year 1989 -90? (ii) Whether on the facts and in the circumstances of the case and having regard to the true meaning of the word 'accrual', the assessee had a right to receive the commission income in the previous year relevant to the assessment year 1989 -90 and there was accrual of such income in the hands of the assessee during the said period? It appears that the assessee was whole time Director of the company in question, namely, M/s. Hidusthan Safety Glass Works Limited (hereinafter referred to as 'the said company'). As per the conditions of service, the assessee was to receive commission at the rate of 1 per cent on the net profits of the said company apart from the monthly salary and certain perquisites which were allowed to him.
(3.) THE disputes which arose in this matter with regard to the assessment was as to whether the said commission which was received by the assessee being a sum of Rs. 1,02,464 relating to the period 1 -7 -1988 to 31 -3 -1989 accrued as income to the assessee and was liable to be taxed for the assessment year 1989 -90. The assessee had filed the TDS certificate issued by the said company for the said assessment year which did not include the commission which was granted to him. The Assessing Officer on the basis of the printed account of the said company where the said commission was specified subjected the tax for the said assessment year (1989 -90).;