N K BRAHMACHARI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following three questions of law have been referred by the Tribunal to this Court under s. 256 (2) of the IT Act, 1961 :

(2.) THE assessment years involved are asst. yrs. 1971-72 and 1972-73, for which the corresponding period of account were the financial years ending on 31st March, 1971 and 31st March, 1972 respectively.

(3.) THE assessee is an individual. If an individual lends money to a company and receives interest, he has to be assessed in accordance with the system of accounting he follows. The company may maintain its accounts on mercantile basis. From that it does not follow that the individual assessee must be taxed on mercantile basis. If an individual does any business with a company, he cannot be taxed on accrual basis only because the company maintains its accounts on accrual basis.