COMMISSIONER OF INCOME TAX Vs. LALA GIRJESH BAHADUR PAL

JUDGEMENT

(1.) THIS reference under section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act), has been made at the instance of the Commissioner of Income-tax, U. P., Lucknow, by the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad (hereinafter referred to as the Tribunal). The question referred to this court for its opinion reads :

(2.) THE assessee is a Hindu undivided family and the reference relates to the year 1956-57 for which the previous year is the year ending on March 31, 1956.

(3.) MR. Raja Ram Agarwal also contended that inasmuch as there was cash system adopted by the assessee, unless there had been actual physical payment, the sum of Rs. 64,020 could not be assessed in the hands of the assessee. We do not agree with the learned counsel. The law does not require that there should be an actual physical transaction and inasmuch as the debt liability of Messrs. M. K. M. O. Sugar Mills (Private) Ltd. came to an end and the debt of the assessee stood fully satisfied, it must be held that there was constructive payment of Rs. 64,020. We, therefore, find no substance in the contention of the learned counsel.