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2015 (8) TMI 430 - HC - Income TaxAdoption of mercantile system of accounting - according to the Revenue, in respect of all the activities of the assessee, the accounting of income and expenditure should be under the same system, i.e. the assessee having adopted mercantile system of accounting, it cannot adopt accounting on cash basis in respect of sales of newspaper and advertisement revenue alone - Held that:- Having regard to the provisions of section 145 of the IT Act, the Apex Court in United Commercial Bank v. Commissioner of Income Tax [1999 (9) TMI 4 - SUPREME Court], Geo Tech Construction Corporation case [1996 (2) TMI 81 - KERALA High Court] and Ganga Charity Trust Fund [1985 (10) TMI 67 - GUJARAT High Court ] have approved the liberty available to the assessee to follow either of the two systems of accounting or the hybrid system. As reiterated by the Apex Court in Taparia Tools Ltd. v. Commissioner of Income Tax [2015 (3) TMI 853 - SUPREME COURT] the entries in the books of accounts are not determinative or conclusive and any matter relevant are to be examined on the touchstone of provisions contained in the Act. Apart from arguing that for the sales of newspaper and advertisement charges, it was not permissible to adopt accounting on cash basis, it was not even contended by the Revenue that the taxable income could not be deduced from the accounts of the assessee. In the light of the principles of law deducible from the statutory provisions and the judgments that we have referred to, we are of the view that no illegality can be attributed to the decision of the Tribunal. In such circumstances, answering the question of law in favour of the assessee and against the Revenue
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