TaxTMI 
TaxTMI 
1985 (9) TMI 121
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....ceivable from Kamani Tubes Ltd. The facts relating to this addition are the following. The appellant-company has its own equipped laboratory for sample testing products. It allows others to make use of its laboratory on a payment of fees. During this year, the appellant gave such laboratory-assistance to three companies, viz., Kamani Tubes Ltd., Kamani Engg. Corpn. Ltd. and Kamani Metal & Oxides Ltd. For the charges levied and payable by the users to it, the appellant prepared debit notes and sent them to the users. Such charges are accounted for in its accounts as income/fees receivable. In this year, Kamani Engg. Corpn. Ltd. and Kamani Metal & Oxides Ltd. have paid the charges as per the debit notes or bills prepared by the appellant. How....
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....vable from the said company. The Commissioner (Appeals) rejected this argument as of no force. He held that it could not be denied that the appellant maintained its books of account on mercantile basis. He further held that it was also a fact that in the past the appellant had been showing the income by way of sample testing and laboratory services fees on the basis of the debit notes raised, i.e., on due or accrual basis. He further held that the appellant's present contention implied that it still followed the mercantile basis insofar as the other two companies were concerned. It, however, made a departure from the regular method of accounting in respect of a particular transaction with Kamani Tubes Ltd. and that this was not allowable un....
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....arges account were reversed at the end of the accounting year. In support of this, the learned counsel relied on Note No. 10 in the 32nd Annual Report for the year 1977 of the appellant-company. Alternatively, it was submitted that this amount did not represent the appellant's income, as it represented merely an entry passed in the appellant's books of account. Shri Trivedi argued that what was taxable under the Income-tax Act, 1961 was the real income of the appellant and not some notional income represented by mere book entries. In support of this, the learned counsel relied on the decision of the Tribunal in the case of ITO v. Dyestuffs & Chemicals (P.) Ltd. [1983] 6 ITD 513 (Bom.), particularly on the discussion at pp. 520-521. 12. Shr....
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.... answers the contentions raised by the appellant and, therefore, the appellant's contentions deserved to be rejected. The learned departmental representative also relied on the decision of the Calcutta High Court in the case of James Finlay & Co. v. CIT [1982] 137 ITR 698. 13. Shri Trivedi, the learned counsel for the appellant, argued that the decision of the Calcutta High Court in James Finlay & Co.'s case relied on by the learned departmental representative was distinguishable on facts. 14. On a careful consideration of the submissions urged on both sides, we are of the considered view that the decision of the Commissioner (Appeals) on this point is correct and does not call for any interference at our hands. We may mention here that t....
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....ceivable from A.I. Ltd. on accrual basis, as the system of accounting followed by the assessee was the mercantile system. The assessee objected and submitted that it had changed the method of accounting from mercantile to cash system and moreover the interest not having been received for a number of years, in the past, and there being no change of receiving that interest or the principal amount, the assessee did not want to give any impression of profits by showing the interest income in the accounts. These contentions were rejected by the AAC and by the Tribunal. The Calcutta High Court held that on the facts there was no question of a change of method as such, but only the treatment of a particular transaction differently or separately fr....