Mercantile accounting and tribunal jurisdiction: late debit note stayed outside the relevant year, with only a clarificatory direction made.

A debit note received after the close of the relevant accounting year was not allowable for that year under mercantile principles, so the claim could not be brought in assessment year 1985-86. A clarificatory direction that the claim should be considered in assessment year 1986-87 did not amount to granting relief for that year, because it only identified the year in which the claim properly arose. The Tribunal therefore acted within jurisdiction, and its reference did not travel beyond the year in issue.

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Issues: Whether the Tribunal exceeded its jurisdiction by directing the Assessing Officer to consider the assessee's claim in the assessment year 1986-87 while deciding the reference relating to assessment year 1985-86.

Analysis: The debit note was held not allowable for assessment year 1985-86 because it was received after the close of the relevant accounting year and, on mercantile principles, could not be claimed for that year. The direction referring the matter to assessment year 1986-87 did not grant relief for that year; it merely clarified that the claim properly fell for consideration there. Such a clarificatory statement did not amount to an excess of jurisdiction, since the substantive decision remained confined to the year in issue.

Conclusion: The Tribunal did not exceed its jurisdiction, and the question was answered in the negative, in favour of the assessee.

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