That the farmer had only contracted to receive the potatoes at the beginning of the marketing season in October-November, so that his potatoes had to be necessarily preserved by the assessee up to that time, i. e., latest by November 30. It was only on the preservation of potatoes, i. e., in good, marketable condition, up to that time, that the assessee was entitled to receive the cold storage charges. The cold storage charges were essentially charges for storing goods (agriculture produce) under defined (controlled) conditions, as to temperature, etc., the contours of the contract, largely oral, as well as the conduct of the parties and the right to receive the charges, and thus the accrual of income in its respect, was only on the cold storage fully performing its part of the contract, i. e., where it delivered, or was in a position to deliver the agriculture produce (potatoes) stored to the farmer in a good, marketable condition at the end of the period for which it was contracted to be stored. There was, as such, in the given facts and circumstances, i. e., the nature and peculiarities of the contract, including the essence of time, no accrual of income (cold storage charges) over time, and no right to receive it accrued, much less vested, in the assessee, on part performance of the contract. Thus, income for the business cycle February to November did not accrue to the assessee to any extent during the period February-March. No adjustment qua any part of the gross revenue for the business cycle or contract period (February-November) was to be made for the year ending March.  That all the costs that went to form the direct, input cost of the provision of cold storage charges, being principally on labour, fuel and power, to the extent they related to the provision of the services for the months of February and March, were to be kept in abeyance under an accounting head, as “prepaid expenses”, for being claimed in the following year, i. e., against the revenue for that period, which included that corresponding to these two months. The direct, input cost on the part performance of the contract for the months of February and March shall be set aside as “closing stock” for being adjusted on the accrual of the corresponding income, with a similar adjustment being made for the opening stock, and altering the returned income to the extent of a difference between the two. As regards indirect costs, no such set-aside or abeyance was required as those were essentially period costs and, thus, eligible for being charged to the operating income statement of the period in which these stand incurred. Accrual of income on the accrual or the vesting of the right to receive it, would be only on the basis of the contract defining the rights and obligations of the parties inter se, so that the principle of accrual would apply to a period income as well. (AY.2007-08, 2009-10)