Commissioner Of Income Tax vs Korea Indo Traders (P.) Ltd.
1992 Latest Caselaw 128 Del

ORDER

The Court

1. This Court vide order dt. 11th October, 1991 had issued notice only with regard to one of the questions which was as follows :

"4. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the trading receipts of Rs. 1,56,000 could not be included in the total income of the assessed in the year of receipt ?"

2. The petitioner is engaged in export of manpower from India. It receives Rs. 15,000 per worker for the purpose. The previous year, relevant to the asst. yr. 1985-86, is calendar year of 1984. The respondent had received a total sum of Rs. 14,05,500 from various workers who were to be exported to Middle East countries. On 31st December, 1984, 104 workers could not be sent abroad and, therefore, sum of Rs. 15,000 received from each one of them, totalling Rs. 1,56,000, was transferred by the respondent to advance service charges account.

3. It is contended by the learned counsel for the petitioner that this change in the manner of accounting cannot be allowed and this sum of Rs. 1,56,000 was an income. It is contended that a question of law does arise.

4. In our opinion, the answer to the question proposed is self-evident. The income of Rs. 15,000 per worker would accrue only as and when a worker was sent out of India on employment. The Tribunal has found that on 28th Dec., 1984 a sum of Rs. 90,400 had to be refunded to 13 workers. It is clear that the sum of Rs. 15,000 per worker which is received is nothing more than an advance and the same can be treated as income only when the contract is completed, namely, when the worker goes out of the country.

5. The answer to the question proposed is self-evident. Therefore, this petition is dismissed.