Method of accounting: business and other income computed on cash or mercantile basis; notified standards may govern computation.

Method of accounting permits income under business/profession and other sources to be computed by either cash or mercantile system regularly employed by the assessee; the Central Government may notify income computation and disclosure standards for classes of assessees or income; the Assessing Officer may make an assessment under section 271 if accounts are incorrect or incomplete, the accounting method has not been regularly followed, or income is not computed as per notified standards.

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