1972 (10) TMI 34

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....) of the Income-tax Act. The assessee had advanced certain loans to a private limited company known as Virmani Refrigeration and Cold Storage Company Ltd. He was being assessed to tax on interest accruing on these loans from year to year. However, for the two assessment years 1953-54 and 1954-55, the assessee did not include any income from this source in its return. The Income-tax Officer estimat....

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.... 10 and 12 of the Act is to be assessed according to the system of accounting followed by him. Accordingly, under the mercantile system of accounting the income becomes assessable when it accrues even if it is not received. Therefore, the income accrued to the assessee at the end of the previous year relating to each of the two assessment years and he was, therefore, liable to include this income ....