1929 (11) TMI 12

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....by the petitioner in connexion with his timber-business was the mercantile system or in other words entries were made in the accounts on the date not of receipt of money or expenditure of money but on the date of transactions irrespective of the date of payment. He further found that certain sales aggregating Rs. 90,618-8-0 accounted for in April 1927 i.e., not in the accounting year, had as a matter of fact taken place in March or earlier and consequently he took this sum into account when calculating the profits for assessment of Income Tax. 3. The Commissioner of Income Tax declined to interfere on revision under Section 33 and on a further petition under Sub-section (2), Section 66, requiring him to refer certain points of law to thi....

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....s of sales were only completed and entered when 25 per cent of the sale money had been paid and bills drawn for the balance, was not correct. Only two transactions of this nature were discovered while other entries showed that this was not the invariable practice. Two specific instances of this kind are mentioned by the Assistant Commissioner in his appellate order. 7. The contention of Mr. Bevan Petman that two of the features of a mercantile system of accountancy are the maintenance of a profit and loss account and a stock book, whereas neither is kept by the petitioner. The absence of these would not in my judgment necessarily imply that this was not the method of accounting employed by the petitioner when as a matter of fact this has....