TaxTMI 
TaxTMI 
2023 (11) TMI 926
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.... accrue since the ICDs were incapable of paying the interest. Rs. 29,04,03,076/- 5. The learned CIT(A) ought to have appreciated that the accrual of interest was not automatic and in the given circumstances no interest had accrued to the appellant and consequently no interest income was rightly offered to tax by the appellant. Rs. 29,04,03,076/- 6. The learned CIT(A) ought to have accepted the explanation offered by the appellant and ought to have refrained from upholding the impugned addition. Rs. 29,04,03,076/- 7. The learned CIT(A) has wrongly inferred that the appellant was using two systems of accounting for the same year. The appellant has done all its accounting only in mercantile accounting system. Rs. 29,04,03,076/- 8. The learned CIT(A) has not appreciated that the appellant had constructed all the accounts in the correct manner. The learned CIT(A) is incorrect in assuming that the accounting system was incorrect. Rs. 29,04,03,076/- 9. The learned CIT(A) has failed to appreciate that all the income either already accrued or to be accrued in future has been correctly and fully subjected to Tax. Rs. 29,04,03,076/- 10. Th....
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....aphical error which has crept in while the Defect Notice was issued. Therefore, the mistake which is apparent in the Defect Notice is required to be rectified. 4. Further, it is respectfully submitted that the delay of 2 days in filing the appeal has occurred on account of the fact that I was out of station in connection with business commitments even though the appeal was prepared in advance to be filed before the Tribunal and the appeal papers were kept ready for my signature and only on my return from out station, the appeal was signed by me and immediately without further loss of time the appeal was filed before the Tribunal on 25.04.23, causing a delay of 2 days. Thus, the delay in filing the appeal is not intentional and it was on account of bona fide reason stated above." 2.3 In view of the above, the assessee could not file the appeal before this Tribunal well in time and by the time the appeal papers were prepared for filing, there arose delay of about 2 days in filing the present appeal before this Tribunal. The reason for the delay in filing the present appeal was due to reason beyond the control of the assessee. He thus prayed for the delay to be condoned....
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..................................... .....................1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period." 2.9 Considering the submissions by both sides and respectfully following the observation by Hon'ble Supreme Court, we find it fit to condone the delay caused in filing the present appeal as it is not attributable to the assessee. Accordingly, the delay in filing the present appeal stands condoned. 3. Brief facts of the case are as under: 3.1 Assessee filed its return of income on 30.09.2015 declaring total income of Rs. 330,33,40,230/-. The case was selected for scrutiny and notices u/s. 143(2) of the act was issued in response to which representative of assessee filed necessary details as called for. The Ld.AO noted that there was a specified domestic transaction between assessee and its AE and accordingly a reference was made to the transfer pricing officer. The Ld.TPO passed u/....
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....off. Which interoperate deposit is under litigation and which deposit is not under litigation has not been described. l don't find the amount of bad debt which is interest in this case is taken to income side in the profit and loss account and then claimed as bad debt. 6. The case decided by honourable Supreme Court as mentioned above is completely applicable in the case of the appellant. In view of the above the ground number 1,2,3,4 and 5 are dismissed and the other grounds are consequential in nature hence not discussed here." 3.4 The Ld.CIT(A) dismissed the appeal of the assessee by relying on the decision of Hon'ble Supreme Court in case of Pr.CIT 6 vs. Khyati Realtors Pvt. Ltd. reported in (2022) 141 taxmann.com 461. 3.5 Aggrieved by the order of the Ld.CIT(A), assessee is in appeal before this Tribunal. 4. At the outset, the Ld.AR submitted that all the grounds raised are in respect of one single issue. He also submitted that similar issue was considered by Coordinate Bench of this Tribunal for A.Ys. 2008-09 to 2014-15 in ITA Nos. 928 to 931/Bang/2017 and 174 to 176/Bang/2018 by order dated 27.11.2018. 5. He submitted that all the observations of the....
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....nagement has changed the accounting policy and accounted for the additional liability on account of increase in gold price as prevalent on 31^st March 2010 in the case of all outstanding provisional imports and due to this change in accounting policy the profit for the year has been understated by Rs. 31,93,21,126. Making charges income is recognized on dispatch of goods. Interest on bank deposits and other interest bearing loans are accounted on accrual basis. However during the year the management has changed the accounting policy with regard to accounting of interest income on interest bearing loans other than bank deposits to cash basis due to which the profit for the year has been has been understated by Rs. 14,82,02,244/- Dividend income on investments is accounted for when the right to receive the payment is established." 21. From the above, it is seen that as per the assessee itself, the management in the present year has changed the accounting policy with regard to accounting of interest income on interest bearing loans other than bank deposits and the changed system is cash basis and due to this, the profit for the year ending as on 31.....
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....e, it should be accepted that the assessee is following mercantile system of accounting in respect of accounting of interest on ICDs also in all the years. 23. In our considered opinion, before holding that the assessee is adopting cash system of accounting in respect of interest income on ICDs as stated by the assessee in the Annual reports of two years i.e. Accounting year ended on 31.03.2011 & 31.03.2012, it has to be ascertained that the interest income has really accrued by applying real income theory as approved by Hon'ble apex court in the case of State Bank of Travancore vs. CIT as reported in 158 ITR 102. In this case, it was held that the concept of reality of the income and the actuality of the situation are relevant factors which go to the making up of the accrual of income but once accrual takes place and income accrues, the same cannot be defeated by any theory of real income. The concept of real income may have to be given precedence in computation of income in a particular case but accrued income cannot be waived as not having accrued to the assessee. In this case, the issue was decided against the assessee and in favour of the revenue because of the fa....
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....hould be accepted that the interest has not accrued and consequently, it cannot be brought to tax even under mercantile system of accounting. But if it becomes irrecoverable after accrual of the income than the same has to be brought to tax in the year of accrual and the assessee may claim deduction as per law u/s 36 (1) (vii) in any year afterwards by writing of the same in its books." On the contrary, the Ld.DR submitted that no details were filed before the Ld.CIT(A) and therefore the claim of the assessee should not be considered. We have perused the submissions advanced by both sides in the light of records placed before us. 6. We note that the Ld.CIT(A) has disallowed the claim of assessee as bad debts by relying on the decision of Hon'ble Supreme Court in case of Pr.CIT 6 vs. Khyati Realtors Pvt. Ltd. (supra). On perusal of the said decision, it is found that Hon'ble Supreme Court rejected the claim contention of assessee by observing that the claim of the amount advanced by the assessee therein to a developer for acquiring an immovable property was in the nature of capital expenditure as the assessee had not brought any evidence or material to show that the advance....