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2012 (6) TMI 435 - HC - Income TaxMethod of accounting - mercantile or accrual basis of accounting - held that:- Whether the method of accounting referred to in section 145 of the Income-tax Act, 1961, prior to its substitution by the Finance Act, 1995, with effect from April 1, 1997, included the hybrid or mixed system of accounting and it was open to a company assessee to follow the cash system of accounting in respect of a particular source of income and the mercantile system in respect of the others? - Whether the provisions of section 209(3) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 1988 have any overriding effect on the provisions of section 145 of the Income- tax Act, 1961? Held that:- the provisions of the Companies Act are meant for the requirement of the Companies Act and in case of infraction thereof necessary consequence as provided in the Companies Act itself follows. - Tribunal had no justification to discard the mixed accounting system resorting to the amended provision of the said Companies Act. - Decided in favor of assessee.
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