JUDGMENT

B.P. Jeevan Reddy, J.-These appeals are preferred by the Revenue against the judgment of the Punjab and Haryana High Court answering the questions, referred at the instance of the assessee, in favour of the assessee and against the Revenue. The questions involved in all these appeals are common. It would be sufficient if we take the case of one of the assessees, M/s. Shiv Prakash Janak Raj & Co. (P) Ltd. Four assessment years are relevant in this case, viz., Assessment Years 1968-69,1969-70,1970-71 and 1971-72. The two questions referred under Section 256(1) of the Income Tax Act, 1961 are:

"(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the interest for the assessment year 1971-1972, had already accrued to the assessee on October 31, 1970, under the mercantile system of accountancy ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the subsequent relinquishment of interest by a resolution dated November 24, 1970, did not affect the tax liability of the assessee on accrual basis?"

2. The partners of a firm, M/s. Shiv Prakash Janak Raj & Co