Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 1068 - HC - Income TaxEntitlement for deduction of deferred interest liability - Held that:- It is clear that the assessee in order to purchase food grains was getting government aid. However, they were claiming deductions of the interest proportionate to the food grains sold and in respect of the interest relatable to the food grains unsold was carried forward to next year and after the sale of food grains, deductions was claimed. This is the practice which was followed by the assessee. However, from 1985-86, they switched on to mercantile system of accounting. In that year, they claimed deductions of interest in respect of food grains which were sold and unsold and also the interest proportionate to the food grains sold which were of the previous year. There was no double claim. The authorities proceeded with an assumption that there is a double benefit claim. They also proceeded on the assumption that once mercantile system is adopted, the assessee looses the benefit of claiming deductions of interest which should have been claimed in the previous year. The denial of the appellant’s claim by the authorities is not justifiable. The assessee is entitled to the benefit of claiming the said deductions relatable to the previous year i.e., for the assessment year 1985-86 - Decided in favour of the assessee
|