I.TAS. NOS.3270/LB, 3271/LB OF 1983-84 AND 200/LB OF 1990-91, DECIDED ON 17TH DECEMBER, 1990. VS I.TAS. NOS.3270/LB, 3271/LB OF 1983-84 AND 200/LB OF 1990-91, DECIDED ON 17TH DECEMBER, 1990.
1991 P T D (Trib.) 817
[Income-tax Appellate Tribunal Pakistan]
Before Abrar Hussain Naqvi, Judicial Member and Nasim Sabir Syed, Accountant
Member
I.TAs. Nos.3270/LB, 3271/LB of 1983-84 and 200/LB of 1990-91, decided on 17/12/1990.
(a) Income Tax Ordinance (XXXI of 1979)---
----S. 23(xviii)---Assessee, a limited company---No disallowance could be made in the case of limited company on account of personal element ---Disallowances under heads travelling and motor vehicle were thus deleted while disallowances under heads entertainment and telephone were confirmed.
I.TA. No.149/HQ of 1987-88 and I.T.A. No.2526/KB of 1986-87 fol.
(b) Income Tax Ordinance (XXXI of 1979)---
----S. 134---Income Tax Appellate Tribunal Procedure Rules, 1981, R.14-- Question of law which goes to the root of the case could be raised at any stage of the proceedings even if the same had not been taken before the earlier forums.
C.I.T. Madras v. Mahalakshmi Textile Ltd. (1967) 66 I T R 710 and C.I.T., Lahore v. Government Jallo Rosin and Turpentine Factory 1976 P T D 206 ref.
(c) Income Tax Ordinance (XXXI of 1979)---
----S. 9---Charge of income-tax---Requirements
The income-tax is to be charged, levied and paid for each assessment year in respect of the total income of the income year. Therefore, before charging, it has to be seen that, there was (i) a total income; (ii) which was for an income year corresponding to the assessment year.
(d) Income-tax---
----'Income received'---Meaning---`Received' means actually received.
Keshav Mills Limited v. C.I.T., Bombay (1953) 23 I T R 230; Pondichorry Railway Co. v. Commissioner of Income-tax (1931) 58 IA 239 and S. Narayanaswami and another v. C.I.T., Madras (1962) 45I T R 335 ref.
(e) Income Tax Ordinance (XXXI of 1979)---
----S. 11(1)(a)'---Entry in the balance-sheet without actual remittance from abroad cannot constitute an income.
Keshav Mills Limited v. C.I:T., Bombay (1953) 23 ITR 230; Pondichorry Railway Co. v. Commissioner of Income-tax (1931) 58 IA 239 and S. Narayanaswami and another v. C.I.T., Madras (1962) 45 ITR 335 distinguished.
(f) Income Tax Ordinance (XXXI of 1979)---
----S.11(1)(a)---What has to be included in the total income under S.11(1)(a) is the income received or deemed to be received---No evidence available on record that any income was received by the assessee in the relevant account year, and even if any amount was received, before including such amount as income of assessee the burden of proof was on the department to establish that such receipt was an income of the assessee in a particular assessment year.
57 I T R 572 fol.
I.N. Pasha for Appellant.
Qadar-ul-Jalil D.R. for Respondent.
Date of hearing: 8th December, 1990.
ORDER
ABRAR HUSSAIN NAQVI (JUDICIAL MEMBER): --These are three appeals filed by a Private Limited Company deriving income from investment, management charges, dividend and commission etc. and relate to the assessment years 1979-80 to 1981-82.
2. In the assessment years 1979-80 and 1980-81 the learned counsel for the assessee has only contested certain disallowances out of profit and loss account and no other ground is pressed. The appeals for the assessment years 1979-80 and 1980-81 are disposed of as under. The assessee claimed expenses and the disallowances made by the I.T.O. in these two years were as under:--
| | | Claimed | Disallowed |
| 1979-80 | Travelling | Rs.3,08,788 | 62,000 |
| | Motor Vehicle | Rs.1,14,252 | 50,000 |
| 1980-81 | Travelling | Rs.2,05,007 | 50,00 |
| | Motor Vehicle | Rs.1,03,400 | 40,000 |
The learned counsel for the assessee contended that the assessee being not a living person, no disallowance could be made on the basis of personal use. In support of his contention the learned counsel for the assessee has relied upon I.T.A. No.149/HQ of 1987-88 dated 27-5-1990. In that case the Tribunal relying upon on earlier decision of the Tribunal in I.T.A. No.2526/KB of 1986-87 dated 5-9-1989 held that no disallowance could be made in the case of limited company on account of personal element. We, therefore, delete the additions in the assessment years under both the heads. However, the disallowances under heads entertainment and telephone are confirmed. No other ground was pressed by the counsel for the assessee.
3. Assessment year 1981-82.---In this year only one addition is contested by the learned counsel for the assessee. The facts of the case are that the assessee company entered into an agreement with Cotton Textile Mills Sudan (hereinafter called as Sudan Company) under which the assessee-company was to provide technical and management services to the Sundan Company in order to establish a Cotton Textile Mill Sudan. This agreement was signed on 31st August, 1974 as a consequence of an earlier agreement of collaboration between the assessee and the Sudan Company dated 24-10-1973. According to the agreement the feasibility study had already been carried out and under the said agreement technical and management services were to be performed under certain terms and conditions given in the agreement. It may also be stated that this agreement was undertaken with clear understanding that International Finance Corporation, Washington was to provide finance for the establishment of the aforesaid Mill. Secondly it was provided in the agreement that if the International Finance Corporation did not sign the investment agreement within six months from the date of the aforesaid agreement, the said agreement would be considered null and void. For the services to be tendered by the assessee it was to be paid a total sum of $ 9,50,000 as fee which would cover all costs of the assessee for technical and other services and other functions to be performed under the provisions of the said agreement upto the date of start of commercial production of the mill. This fee also included all costs to be incurred by the assessee inside and outside Sudan in fulfilment of all the duties and functions stipulated in the agreement except certain facilities mentioned in the agreement. A schedule of payment was also provided in clause (c) of para. 9 of the agreement which was as under:---
(i) 20% as a mobilisation advance which shall become due and payable upon signature of the investment agreement for financing the establishment of the Mill;
(ii) 7 % upon completion of the preparation of all tender documents which are required for the calling of bids for civil construction works required for the Mill;
(iii) 7 % upon completion of the preparation of all tender documents, which are required for the calling of bids for plant and equipment required for the Mill;
(iv) 10% upon the awarding of contracts for civil construction works required for the Mill;
(v) 10% upon the awarding of contracts for plant and equipment required for the Mill;
(vi) 10% upon completion of the civil construction works as aforesaid;
(vii) 10% upon the commissioning of the Mill; and
(viii) 25% upon the start up of commercial production at the Mill.
Another additional amount of $ 75,000 were to be assessed at the end of 12 months from the date of start of the commercial production.
4. It appears that this was a joint venture as the assesses, in lieu of the service rendered and with the fee received in Sudan, wanted to collaborate with the foreign company and to contribute 1.45 million US $ towards its part of equity. Consequently, after the execution of the agreement aforesaid the assessee applied to the Government of Pakistan for permission to establish a cotton textile mill in Sudan as joint venture. The aforesaid permission was granted by the Government of Pakistan, Department of Investment, Promotion and Supplies (Development) Karachi dated 16-7-1975. The aforesaid letter of the Government is reproduced below:--
"Government of Pakistan"
Department of Investment, Promotion & Supplies (Development CDN DTE)
No. F.KAR/DEV(CDN)/20(33)/74Karachi the 16th July, 1979.
To
Messrs Biboojee Services Ltd.
Nelsen's Chambers (3rd Floor)
I.I. Chundrigar Road,
Karachi.
Sub:ESTABLISHMENT OF A COTTON TEXTILE MILLS IN SUDAN
Dear Sir,
I am directed to refer to your proposal contained in your letters dated the 10th October, 1974 and 22nd April, 1975 for the establishment of a Cotton Textile Mills in Buitri near Khartoum in Sudan on joint venture basis between you and the Cotton Textile Mills Ltd. (Khartoum) and the International Finance Corporation (USA) based on 5 years technical and management agreement signed on 31-8-1974, and to inform you that the Government of Pakistan have approved your proposal to set up the joint venture with a total capital of US $ 26.13 million (or Rs.258.687 million) equity US $ 10.13 million (or Rs.100.287 million) and IFC loan US $ 16.00 million (or Rs.158.400 million) of which you would contribute US $ 1.145 million (or Rs.11,336 million) towards equity.
2. This permission is subject to the following conditions:--
(i) You will obtain a copy of letter of approval of the Government of Sudan in respect of Cotton Textile Mill already established in Sudan and submit the same to this Department and to the State Bank of Pakistan.
(ii) Your participation in the joint venture would be as technical partner in the project. The Sudanese Company would pay to you a minimum total installation/consultancy fee of US $ 9,50,000 (or Rs.9,405 million) for technical and other services and functions up to the date of start up of commercial production of the mill. This fee would, however, form part of the total project cost for establishment of the mill.
You would also receive management fee of US $ 75,000 for the first year of commercial production and for the remaining period of four years of the agreement, an amount equivalent to 5% of the net profits of the Company payable at the end of the each financial year of the company.
Projections of your funds for investment in the project are summarised hereunder:--
| Technical fee during the period of installation | US $ 9,50,000 |
| Investment incentive bonus @15% | US $ 1.42,500 |
| | -------------- |
| Total | US $10,92,500 |
Less
| Expenses covering salaries of Project Manager etc. | US $10,00,000 |
| Balance available for investment | US $ 10,00,000 |
| Funds required for investment | US $ 11 45 000 |
| Short fall: | US $1,45,000 |
(iii) Your contribution of US $ 11,45,000 towards equity would be made within the time, as agreed to by the parties.
(iv) in the case of the disinvestment liquidation or nationalisation of the project your share out of the sale proceeds of the assets shall be fully repartriated to Pakistan, through normal banking channels.
(v) The various incentives and facilities for industrial development, as available to other similar undertaking in Sudan would also be available to this project besides an additional facilities that might be made available by the Government of Sudan.
(vi) You will furnish annually to this Department and also to the State Bank of Pakistan an audited copy of the profit and loss account and balance-sheet of the said industrial venture in Sudan.
(vii) You will repatriate your share of profit/dividends in the above mentioned project through recognised banking channels to Pakistan.
(viii) You will undertake to supply such information in connection with your business interest in Sudan as may be required by the Government of Pakistan or the State Bank of Pakistan from time to time.
3.Your acceptance to the above terms and conditions may please be intimated to this Department within a period of two weeks from the date of the issue of this letter .
This supersedes this Department's letter of even number dated 16th April, 1975.
(S.M.A. Ashraf);
Director General
Investment Promotion Supplies.
5. According to the assessee the aforesaid amounts were received by it in accordance with the schedule given in the agreement and was re-invested by purchasing share of the Sudan Company. However, this accrual/receipt of income as well as purchase of shares was not declared by the assessee in the relevant assessment years. For the first time the assessee declared in its balance-sheet for the assessment year 1981-82 in the following manner:--
| Cr. | Dr. |
| Foreign Capital Receipts | 93,48,000 |
| Loan outside Pakistan (Foreign In) | 30,93,125 |
| Foreign Investment (Shares of Cotton Textile Mills Sudan) | 1,24,41,125 |
The assessing officer treated this amount as revenue receipt and made addition of Rs.93,48,000 as revenue receipts and also made an addition of Rs.30,93,125 as unexplained income. In appeal the assessment was set aside and on re-assessment the learned I.T.O. again made the addition of Rs.93,48,000 but after accepting the assessee's explanation did not make addition on account of loan of Rs.30,93,195. Both the documents namely the agreement mentioned above with the Sudan Company as well as the permission of the Government of Pakistan were filed before the assessing officer and he duly considered all these documents and rejected the claim of the assessee that this was in income which was not taxable. When appeal was filed before the learned Commissioner an additional ground was filed that even if the receipts were to be treated as revenue receipts this is not as neither it was received nor it accrued in the assessment year 1981-82. The learned C.I.T.(A) maintained the addition and also rejected she assessee's additional ground of appeal on the ground that this had not been taken before the assessing officer.
6. The learned counsel for the assessee argued the case at length and contended firstly that it was wrongly observed by the learned C.I.T.(A) that the plea incorporated in the additional ground was not taken before the assessing officer. It was submitted that throughout, the assessee's case was that this amount was only a book entry and was neither received nor accrued to the assessee in the assessment year under consideration though it was pleaded that it was a capital receipt. It was submitted that it was not the sole ground of the assessee that it was a capital receipt. It was contended that this is evident from the reply of the assessee, which has been incorporated by the assessing officer in his assessment order. In para 4 of the reply, which has been reproduced by the assessing officer in the explanation it was specifically pleaded that there was no reason to believe that after the lapse of seven years this amount would be taxed by Income Tax Department. It was further contended that in any case all the facts were before the assessing officer as well as before the learned C.I.T.(A) and the assessee's plea that the amount in question could not be taxed in the assessment year 1981-82 and thus the I.T.O. had no jurisdiction to add this amount as income in the assessment year 1981-82 went to -the' root of the case. It was submitted that such a plea is always allowable and can be taken even at the appellate stage. It was submitted that the learned C.I.T.(A) was wrong to observe that further investigation was necessary in this case as the facts narrated above and admitted were also on record. It was contended that in numerous cases the superior Courts even allowed such plea to be taken at the High Court and even at the Supreme Court level. In this connection the learned counsel has relied upon the following cases:--
(1) C.I.T. Madras v. Mahalakshmi Textile Ltd. reported as (1967) 66 I T R 710 (SC India).
(2) C.I.T. Lahore v. Government Jallo Rosin and Turpentine Factory reported as 1976 P T D 206 (Lahore H.C.).
(3) In the first case cited above the Supreme Court of India at page 713 observed as under:--
"There is nothing in the Income tax Act which restricts the Tribunal to the determination of question raised before the departmental authorities. All questions whether of law or of fact, which relate to the assessment of the assessee may be raised before the Tribunal. If for reasons recorded by the departmental authorities in rejecting a contention raised by the assessee, grant of relief to him on another ground is justified it would to open to the departmental authorities and the Tribunal and indeed they would be under a duty, to grant that relief. The right of the assessee to relief is not restricted to the plea raised by him."
In the Jallo Rosin's case the Lahore High Court made similar observation where the assessee had not taken the plea either before the I.T.O. or even before the Tribunal but the High Court allowed it to be raised on the ground as it was apparent on the face of the record and went to the root of the proceeding. At page 82 of the report the learned High Court observed as under:--
There is no doubt that this precise objection was not raised at any stage before the Income-tax Officer and the Tribunal. Nevertheless the objection now raised is apparent on the face of the record and goes to the very root of these proceedings. In Rajendra Narain Chowdhury V, Satish Chandra Choudhry A I R 1924 Cal. 233 it was held that the question as to whether Civil Court has jurisdiction to try a suit, though abandoned in the trial Court, can be raised in appeal (see also 14 IA 160 (P.C.). Also in Puligadda Vonkasubha Rao and others v. Yella Pargoda Sivaramayya A I R 1942 Mad. (sic) it was held that where the decision of the point in appeal affects the jurisdiction of the lower Court, the Appellate Court cannot refuse to adjudicate upon it merely because of an unwise and ill-advised concession made by the appellant in the lower Court."
In the third case cited above, the Karachi High Court held the view where the assessee took a plea before the Tribunal who rejected it on the ground that it had not been raised earlier and the High Court held that the Tribunal had to consider and decide the question of jurisdiction agitated before it.
8. This is trite law as is evident from the case-law quoted above that a question of law which goes to the root of the case could be raised at any stage of the proceedings even if had not been taken before the earlier authorities. In the present case all the facts were before the assessing officer as well as before the learned C.I.T.(A). The only question which had to be decided was as to whether the entry in the balance-sheet amounted to an income taxable in the assessment year 1981-82 which could certainly be decided without going into further investigation.
9. The learned counsel for the assessee had contended that in order to tax any amount certain conditions have to be fulfilled. It was contended that section 9 of the Income Tax Ordinance is the charging section which lays down "..., there shall be charged, levied and paid for each assessment year .... , income-tax in respect of the total income of the income year .... of every person ....". From the reading of this section it is evident that the income-tax is to be charged, levied and paid for each assessment year in respect of the total income of the income year. Therefore, before charging, it has to be seen that, there was:
(i) a total income;
(ii) which was for an income year corresponding to the assessment year.
Now total income has been defined in section 11 of the Income-tax Ordinance which reads as under:--
Scope of total income.---(1) Subject to the provisions of this Ordinance, the total income, in relation to any assessment year, or a person,--
(a) who is a resident, includes all income from whatever source derived, which-
(i) is received, or is deemed to be received, in Pakistan in the income year by or on behalf of, such person; or
(ii) accrues or arises, or is deemed to accrue or arise, to him in Pakistan during such year; or
(iii) accrues or arises to him outside, Pakistan during such year;
(b) who is a non-resident, including all income from whatever source derived which---
(i) is received or is deemed to be received, in Pakistan in the income year by, or on behalf of, such person; or
(ii) accrues or arises, or is deemed to accrue or arise, to him in Pakistan during such year;"
Thus, before taxing any total income it should:
(i) either he received or deemed to be received in Pakistan in the income year;
(ii) accrue or arise or is deemed to accrue or arise in Pakistan:
(iii) accrue or arise to him outside Pakistan during such year;
9-A. Now we take up the above clauses one by one. Firstly, we have to see whether any income had been received or deemed to have been received in Pakistan by the assessee in the income year. The assessee's accounts closed on 31st December, 1980. We, therefore, have to see whether any income was received by the assessee or deemed to be received by the assessee in Pakistan before 31-12-1980. There is no evidence on record nor this is even the claim of the department. It is nobody's case that any amount was received or deemed to have been received by the assessee in Pakistan in the income year i.e. from 1-1-1980 to 31-12-1980. Admittedly no amount had been received by the assessee from abroad in the income year corresponding to assessment year. 1981-82. As stated above this is not even the case of the department. Now we have to see' whether any amount was deemed to be received in Pakistan by the assessee on the basis of any entry in the balance-sheet reproduced above. Now "deemed to be received" means which the Statutes says as deemed to be received. There are Only two sections m the Income Tax Ordinance which create a fiction of law by assuming that under certain circumstances the income would be deemed to have been received whether in fact it was received. The first provision is contained in suction 12. The heading of this section is `income deemed to accrue or arise in Pakistan'. All subsections of this section deal with certain kinds of income which are deemed to accrue or arise in Pakistan. Thus section 12 and all its subsections are not applicable on the facts and circumstances of the present case as none of the subsections are applicable to the assessee's case. As a matter of fact this section is also not applicable because the alleged income has neither accrued nor has arisen in Pakistan to the assessee in the assessment year 1981-82. The next section which creates fiction of law is section 13 which also provides different situations where certain amounts are deemed to be an income of the assessee if remained unexplained. Again. this is not the case of the department that the assessee's case fell under section 13 of the Income Tax Ordinance nor section 1.1 is applicable in the facts and circumstances of the present case. Thus we see that clause (i) is not applicable in the facts and circumstances of the case as neither any income is received by the assessee nor it is deemed to be received in Pakistan. It may be noted here that `received' means actual receipt. In Keshav Mills Limited v. C.I.T., Bombay reported as (1953) 23 I T R 230-the Supreme Court of India has discussed the word `received' at considerable length. At page 242 of the report it was observed by the Supreme Court as under:--
"The `receipt' of income refers to the first occasion when the recipient got the money under his control. Once an amount is received as income, any remittance or transmission of .the amount to another place does clause at the other place."
Relying upon the Privy Council's case in Pondichery Railway Co. v. Commissioner of Income-tax reported as (1931) 58 IA 239 the Supreme Court further observed as under:---
"If therefore the income, profits or gains have been once received by the assessee even though outside British India they do not become chargeable by reason of the moneys having been brought in British India because what is chargeable is the first receipt of the money and not a subsequent dealing by the assessee with the said amount. In that event they are brought by the assessee as his own moneys which he has already received and had control over and they ceese to enjoy the character of the income, profit or gains."
Then dealing-with the phrase "deemed income" the Supreme Court at page 241 observed as under:--
"The expression `deemed to be received' only means deemed by the provisions of the Act to be received. The phrase statutory receipt might be conveniently employed to cover income which is 'deemed to be received' and instances of such statutory receipts are to be found in the provisions of the Act."
The Supreme Court further observed as under:--
"An amount cannot be `deemed to be received' merely by the volition or sweet will of an individual. In all the cases which we have mentioned above the profits earned which were credited in the books of accounts according to the mercantile system of accounting were at best `treated as having been `received' which is neither received' nor deemed to be received and therefore, not within the purview of section 4(1)(a) "
10. This case was subsequently followed by the Madras High Court in S. Narayanaswami and another v. C.I.T. Madras reported as 1962 45 ITR 335. In that case what happened was that certain profits were earned by the assessee outside British India and were not assessed to tax. The assessee purchased certain securities with the accumulated profits earned in the earlier years. The assessee sold these securities and purchased other securities in taxable territory of British India. The following two questions were referred to the High Court for its opinion;--
(1) Whether there was material for the Tribunal's finding that the real effect of the transaction put through was to bring about a remittance to the assessee of his foreign profits to the extent of Rs.37.000 assessable under section 4(1)(b)(iii).
(2) Whether in the circumstances of the case, even if the amount of Rs.37,006 was a remittance of the assessee, such a remittance did not amount to remittance of capital."
The High Court at page 347 made the following observation:--
"The contention of the learned counsel for the assessee that the accumulated unassessed profits held at Trivandrum had been capitalised when they were invested in the purchase of Mysore bonds, well-founded and is supported by authority, see Commissioner of Income-tax v. Muhammad Ismail Rowther. Learned counsel for the department referred us to the judgment of Wrottesley, J. in Walsh v. Randail and contended that it should not be viewed as a case of capitalisation of accumulated profit. The facts in Walsh's case were not similar to what we have to consider now. In that case, it should be remembered, what was ultimately brought into Britain the taxable territory, was money. In our opinion, the case of the assessee falls within. the scope of the rule laid down in Commissioner of Income Tax Muhammad Ismail Rowther and that is authority binding on us Even in the bonds belonged to the Partners, the assessee, when they were brought to Madras, and even if that constituted a remittance, what wit, brought into Madras was capital and not assessable income."
11. The learned counsel for the assessee relying upon this authority has submitted that the income had accrued to the assessee in the assessment years 1975-76 to 1980-81 and since this income earned in the earlier years had been invested in the shares of the Sudan Company this income was covered into assets which were finally shown by the assessee in the balance-sheet in the assessment year 1981-82. On the basis of this authority the learned counsel pleaded that firstly there was no receipt and only an entry in the balance sheet and secondly even if it be considered as a receipt this was a capital receipt.
12. However, to our mind this is irrelevant question in the facts and circumstances of the present case. In the case relied upon by the learned counsel for the assessee there were certain remittances in the shape of bonds. In the present case there is no receipt whatsoever either in the shape of money or in the shape of assets. As a matter of fact there is no remittance whatsoever from abroad. Here the question for decision is as to whether entry in the balance-sheet without actual remittance from abroad can constitute an income. We have already stated above that clause (1) of section 11 is not attracted as neither any income is received nor it is deemed to be received in Pakistan. Clause (ii) of section 11 is also not applicable as it is applicable only where an income is accrued or arisen or is deemed to accrue or arise in Pakistan. Again this is not the case of the department that any income had accrued or arisen or deemed to have accrued or arisen in Pakistan in the assessment year 1981-82.
13. Now we come to the third clause, which seems to be the only clause which is relevant. According to this clause if any income accrues or arises to any person outside Pakistan during such year, that has to be included in the total income of the assessee in relation to the respective assessment year. Admittely, certain amount did accrue and arise to the assessee outside Pakistan. Now question is whether such amounts had accrued or arisen to the assessee outside Pakistan in the assessment year 1981-82. The answer is obvious. Again this is not the case of the department that any income had accrued or arisen to the assessee in the assessment year 1981-82. It may be noted here that in clause (iii) the word `received' is conspicuously absent. Therefore, the income has to be included in the total income on accrual basis. Now there can be a question as to whether the amounts were paid on the basis of the agreement on schedule as mentioned in the agreement. The answer to this question would be simple. There could be two possibilities:
(i) the agreement was implemented and the amounts were receivable by the assessee in accordance with the schedule; or
(ii) the agreement was not implemented.
14. If the agreement was not implemented then there is no basis for the department on which the assessee could be taxed. On the other hand if the agreement was implemented and the amounts accrued to the assessee according to the schedule given in the agreement then the income accrued to the assessee outside Pakistan during the year meaning thereby in the respective years. Obviously the respective years were not the assessment year 1981-82. Thus we have no hesitation to hold that in the assessment year 1981-82 income was neither received nor it accrued or arose to the assessee outside Pakistan. The income accrued to the assessee in the assessment years earlier to the assessment year 1981-82. Since the income accrued to the assessee in the earlier years it could not be taxed in the assessment year 1981-82. Therefore, the addition is directed to be deleted.
15. 'Before parting with this judgment we would like to highlight another point. Under section 11(1), clause (a) what has to be included in the total income is the income received or deemed to be received. Though in the present case there. is no evidence that any amount was received by the assessee in the assessment year 1981-82 but even if it was so received an amount cannot be included in the total income unless it has to be shown that it was income. Every amount is not an income. Therefore, the department before taxing the amount has to show that the amount received is an income. As stated above there is no evidence that any income was received by the assessee in the account year 1981-82. Before including any amount as income of an assessee the burden of proof is on the department to establish that any receipt is an income of the assessee in a particular assessment year. If any authority is needed 57 I T R 572 may be referred.
16. For the foregoing reasons, all the three appeals are accepted to the extent indicated above.
M.B.A./1193/T Appeals accepted.'