COMMISSIONER OF INCOME TAX Vs. PODIMATTOM WINES

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal has referred the following two questions of law for the decision of this court :

(2.) THE respondent is a firm. It is an abkari contractor. We are concerned with the assessment year 1983-84, for which the accounting period ended on March 31, 1983. THE firm had deposited a sum of Rs. 9,86,190 in March, 1980, with the Government as advance kist. THE interest due on this amount for this year amounted to Rs. 39,448. Admittedly, the assessee is keeping its accounts on the mercantile basis. While computing the total income for the assessment year 1983-84, the Income-tax Officer included the said sum of Rs. 39,448 as interest accrued to the assessee on the deposit. In appeal, the Commissioner of Income-tax (Appeals) held that the calculation of interest due on accrual basis is not called for. He directed the deletion of the interest added by the officer in the sum of Rs. 39,448. THE Commissioner of Income-tax (Appeals) stated thus :

(3.) WE heard counsel for the Revenue--senior counsel, Mr. P. K. R. Menon. The assessee was not represented before us.