Home Highlights April 2014 Year 2014 This

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1. Method of Accounting - Assessee switch over from the cash system to the mercantile system of accounting - assessee had to follow the mercantile system and during the...

2. Accrual of interest income - Assessee claims that no real income accrued to the company and merely as the assessee is following mercantile system of accounting it does...

3. Disallowance of prior period expenditure - Mercantile system - Matching principles of accounting - The assessee had claimed deduction for such expenses, citing a...

4. Prior period expenditure - interest liability for the 22 month period - Assessee following mercantile system of accounting, with prudence and conservatism being...

5. Method of accounting - mercantile system of accounting for one project and cash basis for another project - The assessee cannot choose to follow mercantile system for...

6. Disallowance of advertisement expenses - bills received of the said expenses is of April and May 2008 - There is no dispute that the assessee is following Mercantile...

7. Income accrued or received by assessee - overdue interest income - Under mercantile system, interest income accrues with the time. In such cases, interest charged and...

8. Disallowance of the service tax payable under section 43B - since the assessee did not debit the amount to the P&L account as an expenditure nor did the assessee...

9. Deduction of Provision for contingency - Ascertained liability - the system of accounting, followed by the assessee, is mercantile and any expenditure, not paid by the...

10. Prior period expenses adjustment against the prior period income - once the prior period income is held to be taxable, the prior period expenditure also should be...

11. Accrual of interest expenditure / income - CIT(A) deleted the disallowance u/s 36(1)(iii) - Where there is no certainty of collection, revenue cannot be said to be...

12. Addition of interest income - disallowance of interest income by not allowing proportional deduction of interest expenses - if it is presumed that the assessee did not...

13. Recognized system of accounting - maintain its accounts according to AS-7 or AS-9 - the system of accounting followed by it for the last many years as per AS-9 -...

14. Prior period expenditure - when prior period income is taxed prior period expenditure cannot be disallowed - AT

15. Accrual of income - non realization of ‘Provision for surcharge’ - even though the assessee has been following mercantile system of accounting, since it is not real...