SATISH CHANDRA, C. J.

( 1 ) THE question referred to us in this reference relates to the assessment year 1970-71. The assessee is a company. It maintains accounts on the mercantile system. It appears that during the relevant accounting year, the assessee-company on August 14, 1968, entered into an agreement with M/s. India Jute Co. Ltd. for purchasing 2,70,000, yards of D. W. Tarpaulin cloth of specific size, packed in specific manner, deliverable between October, 1968, to June, 1969. Messrs India Jute Co. Ltd. failed to supply the aforesaid goods. The assessee-company sent a bill for damages for non-supply of goods amounting to Rs. 59,194. Messrs India Jute Co. Ltd. repudiated the claim. The assessee-company then filed Suit No. 4117 of 1969 in the Calcutta High Court on December 10, 1969. The suit is still pending. The assessee claimed that this amount of Rs. 59,194 was not assessable as income because it had not been realised in the relevant assessment year nor was there any chance for the success of the claim. The Income-tax Officer, however, repudiated this Submission and added back this amount as income. The matter was taken up in appeal but the Appellate Assistant Commission

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