M.R.SHARMA, J.

1. Since common questions of law and fact are involved in Income-tax References Nos. 93 and 94 of 1974, 5, 16, 53, 68, 109, 110 of 1975, and 3 to 6 of 1976, they are being disposed of by one judgment.

2. For facility of reference, facts giving rise to Income-tax Reference No. 5 of 1975 are briefly stated as under : At the instance of M/s. Shiv Parkash Janak Raj & Co. (P.) Ltd., Amritsar (hereinafter referred to as "the assessee-company"), the Income-tax Appellate Tribunal, vide its order dated October 7, 1974, referred the following questions of law under section 256(1) of the Income-tax Act, 1961 (hereinafter called "the Act"), for our opinion :

"(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 1971-72, 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 ?"

3. The facts o