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2014 (2) TMI 124 - HC - Income TaxSystem of accounting – Deletion made on account of non-accrual of income – Held that:- The approach made by the Tribunal is insupportable – the assessee is maintaining its accounts on the mercantile system of accounting - the Tribunal ought not have found when there is no accrual of income for the reason that foreign exchange was not received on June 11, 1981 - The fact that foreign exchange was not received on June 11, 1981, is completely irrelevant having regard to the system of accounting followed - The question of accrual is essentially related to the question whether the assessee became entitled to receive the amount - If once the question is answered in favour of the assessee, namely, the assessee was entitled to get the amount then necessarily the further question would be that when the assessee would be entitled to get the amount - Once both these questions are answered, then the further question as to when actually the assessee received the amount falls into insignificance in a situation where accounts are maintained under the mercantile system of accounting – Decided in favour of Revenue.
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