Judgment :- Sreedharan, J. At the instance of the assessee and the Department, the Income Tax Appellate Tribunal, Cochin has referred the following four questions of law for decision by this Court. The first three questions arc referred at the instance of the assessee and the fourth at the instance of the Department: "At the instance of that assesses. (i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the interest amount of Rs. 36,066.70 being the interest payable to the assessee as per the award of the arbitrator on the amount of Rs. 3,00,556 withheld by the P.W.D. is a revenue receipt? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was following the cash system of accounting after the termination of its business in 1974 and consequently in holding that the interest amount received by the assessee during the accounting period relevant to assessment year 1979-80 is assessable in the said assessment year? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee is not entitled to claim deduction during the assessment year 1979-80 of the interest paid by the assessee to the Federal Bank during the accounting periods relevant to earlier assessment years? At the instance of the department: (iv) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee is entitled to claim deduction of the interest paid by the assessee to the Federal Bank during the accounting period relevant to assessment year 1979-80?". 2. The assessee was a contractor under the Public Works Department. He was mainly engaged in the construction of sea wall near Kayamkulam. He stopped his work by April, 1974. At that time, a sum of Rs. 3,00,556/- was due to the assessee from the Department and the payment of the same was withheld by the Department. Payment was also due for some work done, for which bills were pending. The matter was referred to arbitration. An award was passed by the Arbitrator on 20-7-1977. As per the Award, assessee became entitled to: (i) Rs. 12,000/- for the work done and for which the bill was pending; (ii) Rs. Payment was also due for some work done, for which bills were pending. The matter was referred to arbitration. An award was passed by the Arbitrator on 20-7-1977. As per the Award, assessee became entitled to: (i) Rs. 12,000/- for the work done and for which the bill was pending; (ii) Rs. 36,066.70 by way of interest for the period from 1-6-1974 to 29-5-1976 on the sum of Rs. 3,00,556 withheld by the department; and (iii) Future interest at the rate of 6% per annum on amounts awarded under items (i) and (ii) above which came to Rs. 790.15 and Rs. 2,076.50. Amounts by way of interest were received by the assessee during the accounting period relevant to the assessment year with which we are concerned in this proceeding. These amounts were brought to tax by the Income Tax Officer as revenue receipt. The assessee contended that interest payable by P.W.D. was neither under a statute nor under a contract and so it was only on ex-gratia basis, which cannot be taken as revenue receipt. This contention was negatived by the Income Tax Officer, the Appellate Assistant Commissioner and the Tribunal. Yet another contention that was raised by the assessee was that he was following the the i can tile system of accounting and so, the amount cannot be brought to tax in the assessment year 1979-80. This contention was also negatived by the Tribunal. Assessee further contended that he had overdraft/loan facilities from the Federal Bank for carrying out the contract work. Even after the termination of the contract work, the assessee was paying interest on the amounts due to the bank. The interest so paid should be allowed as deduction from the amounts received under the arbitration award. In view of the finding recorded by the Tribunal that the assessee was following the cash system of accounting, the amount paid by the assessee to the bank during the accounting period relevant to the assessment year alone was allowed as a deduction. According to the Tribunal, even under the mercantile method the interest paid by the assessee in earlier years cannot be claimed as deduction against the income relating to the assessment year concerned in this proceedings. 3. The assessee and the Department got the question quoted above referred to this Court under S.256(1) of the Income Tax Act. 4. According to the Tribunal, even under the mercantile method the interest paid by the assessee in earlier years cannot be claimed as deduction against the income relating to the assessment year concerned in this proceedings. 3. The assessee and the Department got the question quoted above referred to this Court under S.256(1) of the Income Tax Act. 4. The Tribunal took the view that the interest obtained by the assessee is revenue receipt, on the basis of its decision in the case Rockwell Engineering Company in I.T.A. 715 (Coch) 82. In Rockwell Engineering Co 's case the question whether the interest received by the assessee was revenue receipt liable to be taxed was referred to this Court for its decision. This Court in Rockwell Engineering Co. Ltd. v. Commissioner of Income-tax, (1989) 180 ITR 277, took the view that the interest portion of the amount awarded on the basis of the decision rendered by the Arbitrator is revenue receipt. As per the award in the instant case, amounts were payable to the assessee. Since the amounts were not paid at the proper time, interest was awarded for such delay. The interest so paid is only an accretion to the amounts due to the assessee under the contract. It is therefore attributable and incidental to the business carried on by him. Under no circumstance can it be said that' this interest is dehors the contract business carried on by the assessee. As observed by the Supreme Court in Commissioner of Income-tax v. Govinda Choudhury and Sons, (1993) 203 ITR 881, the interest paid to the assessee partook the same character as receipts for the payment of which he was otherwise en ti tied under the contract and which payment was delayed as a result of certain disputes. So, we have no hesitation in holding that the interest amounting to Rs. 36,066.70 is revenue receipt, liable to be taxed for the assessment year 1979-80. In this view, we answer question No.1 in the affirmative, against the assessee and in favour of the Revenue. 5. On facts, the Income Tax Officer, the Appellate Assistant Commissioner of Income Tax and the Income Tax Appellate Tribunal came to the conclusion, based on records of the case, that the assessee was following the cash system of accounting after the termination of the business in 1974. 5. On facts, the Income Tax Officer, the Appellate Assistant Commissioner of Income Tax and the Income Tax Appellate Tribunal came to the conclusion, based on records of the case, that the assessee was following the cash system of accounting after the termination of the business in 1974. In view of this categoric finding arrived at by the authorities below and in the absence of any material warranting a different conclusion, we accept the said finding of fact and answer the second question referred to us at the instance of the assessee in the affirmative, against the assessee and in favour of the Revenue. 6. The third question referred at the instance of the assessee and the question referred to us at the instance of the Department are inter-related. So, we consider it advantageous to deal with the issues arising out of these questions by a common discussion. It is the case of the assessee that they had overdraft/ loan facilities from the Federal Bank for carrying out the contract work. Even after the termination of the contract work, the assessee was paying interest on the amounts due to the bank. The assessee claimed that the interest so paid during the previous accounting years should also be deducted from the amounts received under the arbitration award. This was not allowed by the Tribunal basing on its finding that the assessee was following the cash system of accounting after the termination of the business. At the same time, the Tribunal allowed deduction of the amount paid by the assessee to the Bank during the accounting period. The stand taken by the Department is that no deduction should have been given of the amount paid by way of interest to the Federal Bank during the assessment year. 7. Section 176(3A) of the Income Tax Act reads: - "Where any business is discontinued in any year, any sum received after the discontinuance shall be deemed to be the income of the recipient and charged to tax accordingly in the year of receipt, if such sum would have been included in the total income of the person who carried on the business had such sum been received before such discontinuance". Assessee in the instant case discontinued his business in 1974. He received the amount, with which we are concerned in these references, after the said discontinuance. Assessee in the instant case discontinued his business in 1974. He received the amount, with which we are concerned in these references, after the said discontinuance. The a mounts so received should be deemed to be the income of the assessee. 11 is to be charged to tax as income in the year of receipt. It is to be so assessed if the sum received by the assessee would have been included in the total income had such sum been received before the discontinuance. S.176(3A) therefore lays down that where any business is discontinued in any year any sum received after the discontinuance shall be deemed to be income of the recipient and charged to tax accordingly in the year of receipt. Any sum received after the discontinuance of the profession shall be deemed to be the income of the recipient. Will it be the income of the recipient arising out of business? The statutory provision in cl.(3A) is clear that the income so received should be charged to tax accordingly in the year of receipt. The words 'charged to tax accordingly', according to us, is indicative of the head of income under which the receipt is to be charged to tax. In other words, the income should be deemed to be income falling under the head' Profits and gains of business or profession', i.e. head 'D' coming under S.14 of the Act. When it is specifically provided that the sum received after the discontinuance of the business should be deemed to be income of the recipient and charged to tax accordingly, it can only mean that the said amount received should be treated as income from business and should be taxed accordingly. This is made more clear by the latter half of cl.(3A). The latter half of clause (3A) states that the sum received should be charged to tax, if such sum would have been included in the total income of the person who carried ok the business had such sum been received before such discontinuance. It means that the said income shall be charged to tax in the year of receipt if such sum would have been included in the total income of the person had it been received before such discontinuance. It means that the said income shall be charged to tax in the year of receipt if such sum would have been included in the total income of the person had it been received before such discontinuance. Total income' has been defined in S.2(45) of the Act as "means the total amount of income referred to in S.5 computed in the raanner laid down in the Act". So, as per the fiction incorporated in cl.(3A), the sum received after the discontinuance of business shall be deemed to be the income and charged to tax accordingly if it would have been included in the total income of the person during the year of receipt. This means that the entire receipt is not to be taken as the income of the recipient as exigible to tax. Only that portion of the receipt which would have been included in the total income of the person during the accounting year as computed in the raanner laid down in the Act alone can be charged to tax. Any view contrary to this would be against the very principle of taxation. Kanga and Palkhivala in their 'Law and Practice of Income Tax', Eighth Edition, Volume I (at page 484) state: - "Sub-sees. (3A) and (4) of S.176 provide the exceptional cases where the income of a business or profession received in an accounting year subsequent to the year of discontinuance of the business or profession is brought to charge. In such cases expenses incurred after the year of discontinuance to earn such income should be allowed as a deduction". This also shows that that part of the receipt which would have satisfied the definition of total income alone is to be charged to tax and not the whole of the receipt. In the same book, at page 623 the learned authors further state: - "However, where a receipt from a discontinued business or profession is taxed under S.176(3A) or (4) as the income of a year subsequent to the year of the discontinuance, any expenditure incurred after the year of discontinuance to earn that income should be allowed". This makes it clear that the expenditure incurred after the year of discontinuance to earn that income should be deducted. By such deduction only the total income which is chargeable to tax can be found. This makes it clear that the expenditure incurred after the year of discontinuance to earn that income should be deducted. By such deduction only the total income which is chargeable to tax can be found. The opinion expressed by the learned Commentators is in tune with the view that for the sum received-after discontinuance of the business to be charged to lax under C1.(3A) of S.176, the same would have been included in the total income of the person. It means that only that much portion of the sum received which would be total income of the assesses as found under the Act alone is to be charged to tax. The total income charged to lax under cl.(3A) of S.176 must be one computed in the mariner laid down in the Act. 8. According to the learned counsel representing the Department, the actual expenditure incurred for earning the particular sum alone can be deducted and nothing more. In other words, according to counsel, if the assessee in the instant case shows that any particular amount was spent for getting the interest which is brought to tax, that expenditure alone should be deducted. Assessee has no case that he had spent any amount forgetting the interest which is now brought to tax. Therefore, the entire amount received by way of interest should be, according to counsel, charged to tax. If such a procedure is adopted, we feel that we will be doing violence to the provisions contained in the Act and it will go against the very principle of taxation. For adopting this contention one will have to ignore the latter half of clause (3A), which enjoins that the sum received would have been included in the total income of the person in the year of receipt. Provisions of the Act for finding out the total income of the assessee should be applied for charging the sum received to tax. 9. For carrying on the business prior to its discontinuance, the assessee had availed of loan/overdraft facilities from the Federal Bank. The interest on the outstand ting amount was payable to the bank. The interest so 'paid for the assessment year must be taken as expenditure for deriving the income from the business. The interest received by the assessee on account of delayed payment is nothing but accretion to the business income. The interest on the outstand ting amount was payable to the bank. The interest so 'paid for the assessment year must be taken as expenditure for deriving the income from the business. The interest received by the assessee on account of delayed payment is nothing but accretion to the business income. Hence, the interest paid to the bank during the accounting year in which the interest on delayed payment was received must be taken to have been incurred for getting the said interest. That portion of the interest, which was paid during the accounting year, must be deducted from the amount received. This is more so since the assessee was following the cash system of accounting after the termination of the business. Therefore, the assessee is not entitled to claim deduction of the interest paid to the Bank during the previous assessment years. In this view of the matter, we answer question No. 3 in the affirmative, against the assessee and in favour of the Revenue. We also answer question No. 4 referred at the instance of the Department in the affirmative, against the Department and in favour of the assessee. A copy of this judgment under the seal of this Court and the signature of the Registrar will be forwarded to the Income Tax Appellate Tribunal, Cochin Bench. IV PENSION IS THE VALUE OF BASIC PENSION 9. It follows that having decided to grant pension of a stated amount, with the object of enabling the ex-service men, to live free from want with decency, self respect, independence and at the pre-retirement standard, the Central Government did not countenance, diminution of the value of this amount of pension. 10. As time passed by, the pensioner found that his money was not able to buy, as much as it did on the date of his retirement. Inflation eroded his capacity to buy the necessities within the amount of pension. The Union of India, aware of the need to keep the ex-service men living in dignity, stepped in by accepting the reports of the Pay Commissions and decided to make up for the lost value of the pension. The device adopted by the Central Government was to pay to the pensioners the dearness relief on pension, just as dearness allowance is paid to its employees. The amount of dearness relief, is an additive to the original pension. The device adopted by the Central Government was to pay to the pensioners the dearness relief on pension, just as dearness allowance is paid to its employees. The amount of dearness relief, is an additive to the original pension. It has not been absorbed into the original pension to make the two sums into one whole fixed sum of money. The relief on pension is, by its very nature variable-it increases or decreases with the cost of living. Therefore it is illogical to test the validity of the petitioners' submission on the consideration whether the relief on pension has been absorbed into the basic pension. The exaggerated emphasis on the separate existence of the number, representing the relief on pension is misleading. It ignores the fundamental fact that pension is not an arithmetical figure. Pension is the value of the reward or compensation for past services. Mr. Parameswaran, learned counsel for the Central Government, urged, with his characteristic tenacity, that pension is always a fixed sum and therefore the "additive" known as the amount of relief on pension never absorbed in basic pension, is not a component of pension. This argument is based on the traditional concept of pension when the ampun Is of pension were unalterable, because in those days the value of money was stable. In the current economy of the country the value of money is not stable. Therefore it is not rational to expect that the amount of relief on pension together with the original pension could be expressed as an unalterable fixed constant sum. Pension is the value of the compensation for past services. It is realised through the mechanism of granting relief on pension. In this process of the cost of living adjustment, it is inevitable that the total sum received by the pensioner varies with the cost of living. The argument of Mr. Parameswaran is not tenable. 11. To simplify the matter I propose to illustrate why relief on pension is the inseparable component of pension. Aware of the bewildering rate at which the value of the rupee fell, eroding the capacity of the original amount, received by the pensioner, to provide a decent living, the Central Government stepped into restore the amount of pension to its intended value. Aware of the bewildering rate at which the value of the rupee fell, eroding the capacity of the original amount, received by the pensioner, to provide a decent living, the Central Government stepped into restore the amount of pension to its intended value. This cost of living adjustment may be illustrated thus: The pension granted, say, in 1970 Suppose in 1975 the inflation reduced the amount of pension to The Central Government added Rs. 5 to secure to the pensioners the intended value of Rs. X Rs. X Rs. X-5 Rs. (X-5) + 5 = Rs. X Therefore the additional amount of Rs. 5 was granted for the purpose of continued receipt by the pensioner of the original value of Rs. X. Therefore the pension is always the value of Rs. X. In the words of the Fourth Central Pay Commission, this adjustment by granting relief on Rs. 5 "is a necessary concomitant of the very concept of pensionary benefits." 12. For the reasons stated in paragraphs 5-11 above I hold that the amount of relief on pension is a part of the pension. Pension is composed of the basic pension plus the amount of relief on pension. V PENSION IS PROPERTY - ITS DEPRIVATION LACKS AUTHORITY OF LAW 13. Art.300A of the Constitution of India lays down that no person shall be deprived of property save by authority of law. In the case of Deokinandan Prasad (Deokinandan Prasad v. The State of Bihar & others, MR 1971 SCI 409), pension has been held to be property. Deprivation of property may take place in various ways such ashy destruction, confiscation or revocation of a proprietary right granted. In this case the payment of relief on pension stands "suspended" during the period of re-employment. The word "suspended" must be understood in the context of the denial of relief on pension during the period of re-employment. During the period of re- employment of the petitioners the payment of relief on pension has been completely stopped. This amount is not payable to the pensioner after termination of such employment. The loss is irretrievable. Therefore the stoppage of payment of relief on pension is deprivation of pension. 14. During the period of re- employment of the petitioners the payment of relief on pension has been completely stopped. This amount is not payable to the pensioner after termination of such employment. The loss is irretrievable. Therefore the stoppage of payment of relief on pension is deprivation of pension. 14. The Executive Government cannot deprive a person of his property of any kind without specific legal authority (Wazir v. State of H.P. ((1955) 1 SCR 408), In this case there is no legislative sanction for depriving the petitioners of the relief on pension. Therefore the stoppage of relief on pension by the orders impugned in these petitions is unconstitutional. VI POINT No. (iii) NOT CONSIDERD 15. In view of my conclusions on point Nos. (i)and (ii) referred to in para.4 of this judgment, it is unnecessary to consider the point No. (iii). VII DELAY AND OTHER ARGUMENTS It was urged that the stoppage of relief on pension coramenced in 1975 and that the petitions filed in 1993 should be disraised on the ground of delay. I do not consider that these petitions should be disraissed on this ground. The payment of relief on pension involves a burden on the exchequer. Mr. Parameswaran asserted that the modern legal thought does not favour judicial interference in cases involving financial burden of the State. I was willing to consider this modern thought. But nothing - arguments or literature - was brought forth to substantiate this assertion. VIII ORDER 15. For the reasons stated in this judgment I allow all the original petitions and make the following order: (i) The orders of the Central Government in its various departments suspending payment of relief on pension to the petitioners during the period of their re-employment after retiring from the armed forces of India, arc illegal and are hereby quashed. (ii) In particular the memorandum No. F13(1) EV (A)/74 dated 6th April, 1974, memorandum No. F13(1)EV(A)/74 dated 27th August, 1974, memorandum No. F10(26)-B(TR)/76 dated 29th December, 1976, memorandum of the Ministry of Finance No. M/ 23013/152/79/MP/VI (P1)/1118 dated 26th March, 1994 and the Circular No. AT/ ORS/TEch/263-V1 dated 23-1-1989 issued by the Controller Defence Accounts. Allahabad, and the Circular No. AT/ORS/263-VII dated 15-3-1989 issued by the Controller, Defence Accounts, Allahabad, are also quashed. Allahabad, and the Circular No. AT/ORS/263-VII dated 15-3-1989 issued by the Controller, Defence Accounts, Allahabad, are also quashed. (iii) The respondents to each of these petitions shall pay to the petitioners the amount of relief on pension as if the orders suspending/ stopping the payment of relief on pension during the petitioners' re-employment were never made.