Consistent accounting method governed tax treatment of anticipated profits, and no referable question of law arose.

Anticipated profits on release orders and import licences were considered for tax assessment despite the absence of an actual sale of goods. The Tribunal treated the assessee's consistent accounting method, followed in earlier years and in the year under reference, as supporting deletion of the addition because the anticipated profit was shown initially and adjusted when the actual profit became known. On that basis, it held that no referable question of law arose under section 256(1) and rejected the reference application.

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Issues: Whether a reference under section 256(1) of the Income-tax Act, 1961 was called for on the question whether anticipated profits on release orders and import licences could be included for assessment in the absence of actual sale of goods.

Analysis: The assessee had consistently followed the same accounting treatment in earlier years and in the year under reference, showing anticipated profit in the first year and making subsequent adjustment when the actual profit became known. The Tribunal accepted the view that the consistent method of accounting adopted year after year supported the deletion of the addition and that no referable question of law arose from the order.

Conclusion: No question of law was found to arise for reference under section 256(1), and the reference application was rejected.

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