G.K. MITTER, J.

1. IN this matter a single question of law depending on the method of accounting used by the assessee has been referred to this Court under s. 66(1) of the Indian IT Act. The facts are very simple. The assessee entered into ten several forward contracts with Sri Lachminarayan Jute Manufacturing Co. Ltd. in April, 1946, to supply loose jute at specified rates, delivery to be effected in September, October, November and December, 1946. Under the terms of the contracts the buyers had the option, in the event of non-delivery of goods by the due dates, of cancelling them on the fifth working day after the due date and recovering the difference between the price specified in the contracts and the market prices as on the date of cancellation of the contracts. It would appear that the due dates of the contracts were extended upto 28th Feb., 1947. As the assessee did not effect delivery the buyers served notices on 1st March, 1947, stating in respect of each contract that as the assessee had failed to hand over the documents in fulfilment of its obligation the buyers declared their option to cancel the contract and to charge the difference between the contract price