RAJA MOHAN RAJA BAHADUR vs THE COMMISSIONER OF INCOME-TAX, U.P.

The Supreme Court held that under the U.P. Encumbered Estates Act, 1934, the receipt of U.P. Encumbered Estates Bonds by the appellant constituted a receipt of income, as they were received in satisfaction of the debtor's liability. The Court clarified that for an assessee maintaining accounts on a cash basis, the receipt of money or money's worth is the determining factor for taxable income, not merely the accrual of rights. The appeal was dismissed, affirming the lower courts' decisions that the bonds represented income received at the time of their receipt.