These three appeals filed by same assessee are heard together and disposed of by this common order for sake of convenience. 2. assessee is individual. He derived income from salary as employee of Kamani Metals & Alloys Ltd. He is member of Kamani family. There were family disputes in that family since 1973. assessee followed financial year as his previous year. case of assessee was that he was paid salary only up to 31-12-1976 by his employer. No salary was paid for period subsequent to 31-12-1976. Though assessee was claiming salary for period from 1-1-1997 till date of his resignation with effect from 31-7- 1978, employer had not admitted its liability to pay salary to assessee as claimed by him. On contrary, employer had raised certain counter-claims on assessee. matter has been referred to arbitrator and is pending before him. Under circumstances, assessee claimed that no salary was due to him and so, nothing was taxable as salary in respect of his employment with aforesaid company. period under dispute between assessee and department was from 1-1-1977 to 31-7-1978, falling within three assessment years 1977-78, 1978-79 and 1979-80, with which we are concerned in these three appeals. 3. ITO did not agree with claim of assessee. According to him, assessee was claiming salary for disputed period and has made entries i n his own books and so salary for that period must be held as due to assessee. In this view of matter, he taxed amount of salary payable to assessee under terms of his service agreement under consideration. 4. assessee appealed to AAC, who confirmed action of ITO and dismissed appeals. 5. In these further appeals before us, Shri Y.P. Trivedi, learned representative for assessee, urged before us that action of revenue authorities was not justified. He referred to paragraph 3 of letter of appointment dated 12-2-1971, which states that service arrangement between assessee and aforesaid company could be terminated by either party by giving three months written notice to other party and in case of such termination only compensation is payable as mutually agreed upon or as decided by arbitrator. He explained that entire Kamani group of concerns were in difficulty because of internal disputes amongst family members relating to control of different concerns of group. assessee did not render any service to aforesaid company after 30-6-1976 and yet, company had paid salary to assessee up to 31-12-1976. Further, company had issued several letters to assessee saying that assessee was not rendering any service as per contact and so was not entitled to any salary. assessee was contesting matter before arbitrator on ground that his services were not formally terminated and so he was entitled to salary even though he has not worked for his employer. He stated that it is doubtful whether assessee will get any compensation from arbitrator in view of employers stand contained in its letters dated 1-7-1978 and 18-11- 1980 addressed to arbitrator. He then took us through certain decisions of Supreme Court and other High Courts. In particular, he referred to decision in case of Dr. S. Dutt v. University of Delhi AIR 1958 SC 1050 for proposition that if there is breach of service contract, neither employee can be forced to do specific performance nor employee can claim salary after cessation of service, though employee may get compensation from other party if so decreed by competent authority. He also referred to decision in case of Dr. Bool Chand v. Chancellor, Kurukshetra University AIR 1968 SC 292 laying down same proposition. Further, he referred to meaning of words due and legal right as found in Law of Lexicon by T.P. Mukherjee. His point was that no debt accrues in favour of assessee unless other party admits debt. He stated that there is distinction between statutory contract and ordinary commercial contract and after contract of latter type is broken, then aggrieved party will not receive any salary after breach though he may receive compensation which, according to him, is not assessable under head Salaries. Finally, he referred to doctrine of real income urging that assessee had not received any salary at all nor has any salary accrued in his favour and so, it cannot be said that assessee had earned any real income which can be assessed to tax. He also referred to Tribunal decision in case of Addl. First ITO v. J.M. Shah [1983] (Bom.) in support of his contention. 6. Shri A.P. Srivastava, learned representative for department, on other hand, supported order of appellate authority. He stated that assessee himself is claiming before arbitrator that he was entitled to his salary as per agreement for disputed period. assessee has resigned only from December 1978. service agreement stated that service is to be terminated by written notice and since no such notice has been given, service must be deemed to be continuous till date of resignation. 7. Shri Y.P. Trivedi replied that assessee should be entitled to salary under agreement only if he has rendered any service as envisaged under agreement. Admittedly, assessee has not rendered any service after 30-6-1976 and so no salary was ordinarily due to him under agreement. What assessee was claiming before arbitrator was not salary for disputed period as such, but compensation under agreement for termination of services. 8. We have considered contentions of both parties as well as facts on records. admitted facts are that assessee was employee of aforesaid company; that he tendered service till 30-6-1976; that he was paid salary till 31-12-1976, that he was not paid any salary after that period; that company was not admitting its liability to pay any salary after 31-12-1976 and that assessee resigned from service from 1-7-1978. question that is raised in these appeals is whether assessee can be said to have earned any salary income for period from 1-1-1977 to 30-6-1978. Section 15 of Income-tax Act, 1961 states that any salary due from employer, whether paid or not, as well as any salary paid to assessee, whether due or not, are both taxable under head Salaries. Admittedly, assessee has not been paid any salary for period under consideration. only other question that is to be considered is whether any salary has become due to be paid to assessee for same period. amount becomes due to be paid to assessee when it has accrued in his favour. amount is said to accrue in favour of person when that person from whom it is claimed admits liability or if liability is denied by him, then person is able to get award or decree in his favour against party denying his claim. These basic principles are well established. We may refer to decisions of Supreme Court in case of CIT v. Ashokbhai Chimanbhai [1965] . In this case, Supreme Court laid down doctrine of real income which says that there can be no tax on notional income and there can be tax only when assessee earns real income. In case before us, assessee has no doubt made claim before arbitrator but employer has not admitted claim. Respectfully following principles laid down in aforesaid authorities, we hold that no amount has become due to assessee during previous years under consideration as there is no admission of liability by employer nor is there any award or decree in favour of assessee. This conclusion of ours is also supported by authorities cited by Shri Y.P. Trivedi which we have referred to earlier. In view of above reasons, we hold that assessment of notional income under head Salaries as has been done by revenue authorities, was not justified. We, therefore, delete those notional salary incomes from total incomes of assessee during three assessment years under consideration. 9. In result, three appeals are allowed. *** X v. Income-tax Officer