2001 (10) TMI 262

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....sst. yr. 1992-93. In spite of service of notice the assessee has not appeared before this Tribunal at the time of hearing. However, the appeal is disposed of after hearing the Departmental Representative. 2. The first ground of appeal is regarding the direction of the CIT(A) to take into account the interest income on maturity of FDRs. The AO found that the accrued interest was shown at Rs. 9,000....

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.... of interest which was offered by the bank at the relevant point of time. The AO instead of making the verification and enquiry by invoking his power under s. 131 of the Act he simply estimated the interest @ 10 per cent per annum on the assumption that normally on long-term deposit the bank allowed 10 per cent interest. The assessee appears to have followed the mercantile system of accounting. So....

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....orders of both the authorities below in respect of the interest is set aside and the matter is remanded back to the file of the AO for making fresh enquiry. The AO shall make a fresh enquiry on the interest income and find out the actual rate of interest which was offered by the bank at the relevant point of time and the same shall be included on accrual basis. The AO shall give adequate opportuni....