1989 (3) TMI 29

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....llowing question of law under section 256(1) of the Income-tax Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the accrued interest on advances to Brahmachari Research Institute (P.) Ltd. amounting to Rs. 41,534 for the assessment year 1971-72 and Rs. 43,240 for the assessment year 1972-73 was the assessee's income li....

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....e assessee is that Brahmachari Research Institute (P.) Ltd. used to maintain its accounts on mercantile basis and had shown this liability to pay interest on accrual basis in its accounts. If Brahmachari Research Institute (P.) Ltd. maintained its accounts on mercantile system, it does not follow that the assessee must be assessed on mercantile basis, unless it is shown that he had also maintai....

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....n during the previous years relevant to the two assessment years under consideration, further advances were made by the assessee to Brahmachari Research Institute (P.) Ltd. The accrued interest on these advances was credited in the account books of Brahmachari Research Institute (P.) Ltd. It has not been found by the Tribunal that the assessee did not follow the cash system of accounting. Until....