PRADIP COMMERCIAL (P.) LTD. Vs. CIT

JUDGEMENT

(1.) This appeal was admitted by an order of this court dated 31-7-2002, on the following substantial questions of law:

(2.) Accordingly, accounting system on cash basis in so far as income on account of interest is concerned should have been accepted by the learned Tribunal. He has relied on a decision of the Supreme Court CIT v. Bilahari Investment P. Ltd., 2008 299 ITR 1. In this judgment, it is observed, amongst others, the accounting system cannot be discarded unless the Department records a finding that the method adopted by the assessee results in distortion of profits, the Department cannot insist on substitution of the existing method. In this case, Mr. Khaitan submits that there was no finding nor any decision either by the Assessing Officer or by the learned Tribunal that the mixed accounting system needs to be discarded because the same results in distortion of profit. In other words, he said that he cannot make a piecemeal change in the accounting system. Ether the entire accounting system has to be discarded or not at all.

(3.) He submits that the amendment of the Companies Act has got no impact as wrongly held by the learned Tribunal though this amendment of the Companies Act is later piece of legislation but still then the income-tax authority is not bound by the provisions of the said amended provision.