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2016 (8) TMI 361 - AT - Income TaxDisallowance of the provisions directly debited in the balance sheet - method of accounting adopted - CIT(A) allowed the claim - Held that:- It is notable that the ld. CIT(A) after considering the recognized system of accounting followed consistently by the assessee and accepted by department in previous years and keeping in view the rule of consistency as envisaged by Hon’ble Apex Court in the case of CIT vs. Realest Builder & Services Ltd., (2008 (5) TMI 6 - SUPREME COURT ), has rightly observed that the Assessing Officer cannot reject the method adopted by assessee and also cannot apply a different method of accounting in a subsequent year unless he is able to demonstrate that there is under-estimation of profits by giving facts and figures in that regard. In the instant case no such facts and figures have been assigned by the Assessing Officer to discard the findings reached by the ld. CIT(A). Moreover, the treatment of the assessee with regard to accounting of income and expenses from the business of Fleet Management Services is in accordance with the accepted accounting method as laid down in AS-9 issued by the Institute of Chartered Accountants of India. The ld. DR could not rebut the contention of the assessee that the buffer account created is in the nature of amount received on account of services to be rendered over the period of lease in respect of the leased cars and any income or loss in this regard arises only at the time of determination, i.e., at the end of the tenure of the contract, and till such time the assessee holds the amount with an obligation to render the services during the tenure of the contract. In presence of these facts, we do not find any good reason to interfere with the order of the ld. CIT(A). - Decided in favour of assessee.
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