Meaning of “Is received”

Case Name : CIT Vs. Dharamdas Hargovandas

Citation :[1961] 42 ITR 427 (SC)

Court : Supreme Court

Section : 5

Meaning : The words ‘is received’ are not terms of art and their meaning must receive colour from the context in which they are used. In the context of section 5(1)(a), these words could only refer to the first receipt.

Case Name : Keshav Mills Ltd. Vs. CIT

Citation :[1953] 23 ITR 230 (SC)

Court : Supreme Court

Section : 5

Meaning : The word ‘receipt’ of income refers to the first occasion when the recipient gets the money under his own control. Once an amount is received as income, any remittance or transmission of the amount to another place does not result in ‘receipt’ within the meaning of clause (a) of section 4(1) of the 1922 act, at the other place.

Case Name : CIT Vs. Ashokbhai Chimanbhai

Citation :[1965] 56 ITR 42 (SC)

Court : Supreme Court

Section : 5

Meaning : Income is said to be received when it reaches the assessee.

Case Name : CIT  Vs. Govind Prasad Prabhu Nath

Citation :[1988] 35 TAXMAN 513/171 ITR 417 (ALL.)

Court : Allahabad High Court Section : 5

Meaning : Neither, the word ‘income’ nor the words ‘is received’, ‘accrues’ and ‘arises’ have been defined in the act. Income can be said not to have resulted at all if there is neither accrual nor receipt of income. For the purposes of the act, income can be said to be received when it reaches the assessee but it can be said to have ‘accrued’ or ‘arisen’ only when the right to receive the said income becomes vested in the assessee. It is, therefore, also clear that income may accrue to an assessee without the actual receipt of the same. The said income can be received later on provided the assessee has got a right to receive the said income. According to the oxford english dictionary, the meaning of the word ‘accrue’ is to fall as a natural growth or increment; to come as an accession or advantage. The word ‘arise’ is defined as ‘to spring up, to come into existence’. The words ‘accrue’ and ‘arise’ do not mean actual receipt of profits or gains. Both these words are used in contradistinction to the word ‘receive’ and indicate a right to receive. Thus, it is manifest that if an assessee acquires a right to receive the income, the income can be said to accrue to him though it may be received later on. Unless and until there is created in favour of an assessee a debt due by somebody, it cannot be said that he has acquired a right to receive the income or that income has accrued to him. A mere claim to income without an enforceable right thereto cannot be regarded as accrued income for the purpose of the income-tax act.

Case Name : CIT  Vs. Shinwa Kaium Kaisha Ltd.

Citation :[1986] 26 TAXMAN 277 (CAL.)

Court: Kolkata High Court

Section : 5

Meaning : The expression ‘receipt’ has not been defined in the act but the meaning of the expression ‘receipt’ has been made clear in sections 5 and 9 of the income-tax act, 1961. From a plain reading of sections 5 and 9, it appears that the expressions ‘accrued’ or ‘arisen’ or ‘received’ or ‘deemed to be received’ have been used in the act and they must be given their plain meaning in the absence of any particular definition.

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