COMMISSIONER OF INCOME TAX Vs. SATYANARAYAN GUPTA HUF

JUDGEMENT

(1.) THE present reference is at the instance of the CIT, Orissa, raising the following question :

(2.) THE facts indicate, inter alia, that the assessee is aN HUF. The assessment year involved was 1982 83 and the accounting year ended on 27th Oct., 1981. The assessee, on 22nd April, 1981, received income tax refund and also interest thereon under S. 244 of the IT Act. The assessee pleaded before the ITO that the interest received by it should have been spread over because it followed the mercantile system of accounting which the ITO refused. On appeal, the AAC restored the matter to the file of the ITO directing him to verify whether, in fact, the mercantile system of accounting was followed by the assessee and it was directed that if it was found that the system of accounting was mercantile, then the assessee's contention was to be accepted. On appeal by the Revenue, the Tribunal found that the assessee was maintaining the books of account on the basis of the mercantile system of accounting.