MORVI INDUSTRIES LTD. vs COMMISSIONER OF INCOME TAX (CENTRAL)CALCUTTA

The Supreme Court held that under Section 4(1)(b)(i) of the Income-tax Act, 1922, income accrues when it becomes due, not when it is payable. The Court ruled that the relinquishment of commission and office allowance by the managing agent, after they had become due but before they were payable, does not allow for deduction under Section 10(2)(xv) as it was not for the purpose of business or commercial expediency. The amounts were rightly included in the total income of the appellant company, affirming the decisions of the Income-tax Officer and the High Court.