TaxTMI 
TaxTMI 
2009 (2) TMI 194
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....ied in not upholding the disallowance of interest payment of Rs. 15,667 claimed by the assessee under the head 'finance commission' and interest which did not pertain to the accounting period relevant to the assessment year under reference ? (ii) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in not upholding the disallowance of Rs. 15,667 out of the total liability of Rs. 28,000 claimed by the assessee as having accrued during the year on account of hire purchase commission ? (iii) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in not upholding that the liability of Rs. 28,000 claimed by way of accrued hire-purchase commission was in....
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.... common order. 4. The brief facts relevant to the issue are that the assessee has claimed deduction of finance commission which was charged as expenditure in the profit and loss account of the assessee. The aforesaid deduction was claimed in the same year in which the hire purchase agreement was entered by the assessee irrespective of the fact that the actual payment was made even in the following years. The assessee had purchased trucks, trolleys, etc., under an agreement with the finance companies, and as per the agreement for hire purchase, the assessee was to make payment of the hire purchase amount and finance commission in instalments. As per the accounting system adopted by the assessee. the entire amount payable towards finance c....
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....at such benefits have been denied more so when, these were almost the last assessment years of the firms as the firms closed theft business subsequently. Referring to the judgment of the hon'ble apex court rendered in the case of CIT v. Bilahari Investment P. Ltd. [2008] 299 ITR 1, he submits that if the Department has allowed a particular method of accounting for several years, then for a subsequent decision taken by the Department to change the method of accounting, reasons are required to be given. It is stated that though certain reasons have been given, but they are not germane to any legal proposition and now looking to the amount involved in these cases and business having been closed, and the principle laid down by the hon'ble apex ....
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....i Investment P. Ltd. [2008] 299 ITR 1 does not apply. 8. We have considered the rival submissions of the parties and perused the record carefully. 9. It is not in dispute that the mercantile accounting system was adopted by the assessee and was permitted by the Revenue for several years. By virtue of the said accounting system, the assessee was claiming benefit of finance commission in the year of hire purchase agreement itself irrespective of the fact that the amount of instalments as per the hire-purchase agreement was actually paid in the subsequent years. Answer to the question whether such an accounting system was permissible or not, is not before us, further the Department itself was permitting the said accounting system accordi....