TaxTMI 
TaxTMI 
2002 (12) TMI 41
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.... of the Income-tax Act, 1961, has come for our opinion at the instance of the Department. The said reference concerns the assessment year 1977-78 and the assessment year 1978-79. The question referred to above is as follows: "Whether, on the facts and in the circumstances of the case and in view of the admitted position that the assessee has been following the mercantile system of accounting in r....
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....s on mercantile basis as its accounts were maintained on mercantile basis. For the assessment year in question, the assessee filed its original return of income on June 29, 1977, showing a loss of Rs. 21,62,981. This return was revised on August 30, 1978, wherein loss was claimed at Rs. 24,70,850. In the revised return, cash assistance and duty drawbacks were accounted on cash basis. They were ear....
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....eal to the Tribunal which confirmed the order of the Commissioner of Income-tax (Appeals) on this point. Therefore, the Tribunal decided the matter in favour of the assessee. Hence, this reference. Arguments: Mr. R.V. Desai, learned senior counsel for the Department, contended that the assessee was following the mercantile system of accounting and that, for the first time during the assessment ....
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....ority has further found that by this change no loss is sustained by the Revenue. This finding of fact has been confirmed y the Tribunal. Therefore, we see no reason to interfere with the judgment of the Tribunal. In the case of CIT v. Citibank N.A. [1994] 208 ITR 930 (Bom) mixed system of accounting has been approved in respect of interest on problem loans receivable by banks by the Bombay High Co....