AI Drafter 
TaxTMI 
TaxTMI 
2003 (5) TMI 23
X X X X Extracts X X X X
X X X X Extracts X X X X
....uries at Thrissur. The assessment orders concerned in all these cases are for anyone of the assessment years from 1988-89 to 1992-93. Since the details of the assessment orders have not much relevance for the purpose of this case, they are not set out in detail. The brief facts necessary for disposal of these cases are as follows. The respondent-assessees in all these cases are conducting kuries at Thrissur. The question as already noted is as to whether the respondent-assessees are liable to return the profits arising out of the various kuries conducted by them as accruing on the date of termination of the kuries. The various items which formed the profit of the kuri business other than commission are veetha palisa and auction discount. The assessees had been disclosing the said receipts as income for assessment only after the expiry of three years from the date of termination of the kuri. According to the assessees, this is a practice which is being followed by them consistently ever since they started the kuries, and that this was being accepted by the Assessing Officers concerned till the assessment years with which we are concerned. According to the Assessing Officer, veeth....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts own method of accounting because that method was more palatable. Against the order of the Income-tax Appellate Tribunal, the Revenue has sought reference of certain questions of law and the same was referred in I.T.R. Nos. 33, 36 and 39 of 2000. The question of law referred in I.T.R. No. 33 of 2000 reads as follows: "Whether, on the facts and in the circumstances of the case and in the light of the finding of the Assessing Officer that the profit on terminated kuries accrues in the year in which the kuri has terminated and veetha palisa outstanding in respect of the terminated kuries in the relevant previous years has to be included in the assessee's income, the Tribunal is right in law in holding differently and in directing the officer to assess the profit on the basis of the actual realisation in accordance with the method consistently followed by the assessee?" The question of law referred in the other two references and in the appeals are also by and large similar to the one extracted above. Learned Central Government standing counsel for taxes appearing for the applicants/appellants in all these cases submitted that the veetha palisa due to the defaulted subscribe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d of accounting in respect of the veetha palisa and auction discount, the Assessing Officer cannot adopt a different method. Counsel accordingly submitted that though there is no definite finding by the Tribunal on the above factual situation, the conclusion reached by the Tribunal has to be sustained. Counsel further submitted that the decision of this court in Trichur Kuri Syndicate's case [1995] 211 ITR 365 has been rightly applied. Sri P. Balakrishnan, learned counsel appearing for the respondents, in I.T.A. Nos. 13 and 48 of 1999 had also made submissions on the above lines, and submitted that there is no scope for interference with the orders of the Tribunal. Sri N. Subramanyan, learned counsel appearing for the respondent, in I.T.A. No. 49 of 1999 has also addressed the arguments based on the findings of fact entered by the Commissioner of Income-tax (Appeals) and submitted that on the said findings, the decision of this court in Trichur Kuri Syndicate's case [1995] 211 ITR 365 squarely applies. We have considered the rival submissions and have also perused the orders of the Assessing Officer as well as the two appellate authorities in these cases. Though the Assessing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g a particular method of accounting in respect of the income from kuries, it is not for the Revenue to substitute its own method of accounting because that method was more palatable. We have also noticed that the decision of this court in Trichur Kuri Syndicate Ltd. [1995] 211 ITR 365 was rendered on the basis of the facts found by the Tribunal. This court had noted that the assessee's explanation in relation to the surplus income from chitties was that subscribers sometimes used to make excess payment towards instalments due from them, and when the chitty was terminated and when the surplus was lying to the credit of the subscribers, the assessees treat them as amounts due to the subscribers liable to be refunded to them on their demand, and accordingly wait for a period of three years, within which the subscribers could seek refund of the excess amount, that as and when any amount remains unrefunded at the end of the three year period, they were disclosed for the assessment for that year and assessed. This court also noted the further contention that the amounts of surplus were thus amounts due in credit to the various subscribers who had paid in excess and did not constitute ....