Law:

Section:

JUDGMENT Sohani, J. (4-4-78).-This is a reference under s. 256(1) of the I.T. Act, 1961, hereinafter called "the Act". By this reference, the Income-tax Appellate Tribunal, Indore Bench, Indore, has referred the following questions of law to this court: "1.Whether, on the facts and in the circumstances, the Tribunal is justified in law in holding that the income of the assessee became liable to be assessed in the assessment years 1966-67 and 1967-68 and not in the years 1946-47 and 1947-48? 2.Whether, on the facts and in the circumstances, the Tribunal was justified in law in holding that as the liability itself was disputed by M/s. Kalyanmal Mills, the assessee's right to receive remuneration or commission under the terms of the agreement accrued only on the decision of the High Court on December 14, 1965?" The material facts giving rise to this reference briefly are as follows: The assessee, Sardar Arjunsingh Ahluwalia, who was assessed as an individual, died during the pendency of these proceedings and he is represented by his legal representative, Smt. Manjit Ahluwalia. The assessment years in question are 1966-67 and 1967-68 for which the accounting periods ended respectively on 31st March, 1966, and 31st March, 1967. In the assessment year 1966-67, the assessee received a sum of Rs. 10,000 and in the assessment year 1967-68, the assessee received a sum of Rs. 65,532 from M/s. Kalyanmal Mills Ltd., Indore. These sums were received by the assessee in pursuance of a final decree passed by the learned Additional District Judge, Indore, in a suit for accounts instituted by the assessee against M/s. Kalyanmal Mills Ltd., Indore. The case of the assessee in that suit was that by an agreement dated 2nd January, 1946, the assessee, who was employed as a personal assistant to the managing director of M/s. Kalyanmal Mills Ltd. and was carrying on business in the name of M/s. A. Ahluwalia & Sons, was appointed, on the terms and conditions mentioned in that agreement, to look after and supervise the waste department of the mills, that the agreement was to remain in force for a period of five years commencing from 1st January, 1946, but Kalyanmal Mills Ltd.…

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