HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Madras v K. R. M. T. T. Thiagaraja Chetty & Co.
Civil Appeals Nos. 131, 131-A and 131-B of 1952
[1954] SCR 258 ·
Indian Income-tax Act, 1922, sections 4(1)(b), 10, 12 and 13
Sources & disclosures includedDownload original judgment / order
5-judge bench · Patanjali Sastri CJI · S. R. Das J. · Vivian Bose J. · Ghulam Hasan J. (author) · N. H. Bhagwati J.
Assessment years: 1942–43
01 · Facts of the case
Managing-agency commission of Rs. 2,26,850 was credited to the firm and debited as company expenditure, but payment was withheld and transferred to suspense during a dispute over a debt owed by the firm.
Source: Primary report: SCR 259–263
02 · Discussion by the Hon’ble Court
Did withholding payment or later quantification prevent accrued commission from being assessed? The earned commission belonged to the firm; transferring it to suspense did not undo accrual. There was no evidence supporting the Tribunal’s cash-basis finding, and cash withdrawals alone did not establish cash accounting. Computation quantified the right rather than creating it; no contractual condition postponed accrual until accounts were made up.
03 · Judicial decision
Revenue’s three appeals were allowed with costs in both courts.
Source: Primary report: SCR 268
04 · Outcome / in whose favour
Revenue. Revenue’s three appeals were allowed with costs in both courts.
Source: Primary report: SCR 268
05 · AKHB REVIEW POINT
Distinguish an accrued entitlement from postponed payment and from a genuine condition precedent. The Court did not decide the hypothetical case of commission contractually conditional on a later event.
Source: Primary report: SCR 267–268
Source & verification
Download original judgment / order · Open cited source rendition
Eleven pages / SCR 258–268. Final page starts Kshetra Mohan, a separate judgment.
Statutory scope
Historical statutory text and assessment period only. Present statutory equivalence and later judicial treatment are not cleared.
Later treatment
Source checked 2026-10-19. Subsequent treatment and current-law applicability have not been comprehensively checked.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from an identified primary report. Independent human review is not represented.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court’s holding. No current-law clearance is claimed.