THE COMMISSIONER OF INCOME-TAX, MADRAS vs A.GAJAPATHY NAIDU

The Supreme Court held that under Section 4(1)(b)(i) of the Indian Income-tax Act, 1922, income accrues when the assessee acquires a right to receive it, and not when it is received. The Court emphasized that the provisions of the Indian Income-tax Act must be interpreted independently, without reliance on English statutes. It was determined that the Income-tax Officer cannot relate back income that accrued in a later year to an earlier year based on prior transactions, affirming that such income is recognized only in the year it is received.