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2015 (3) TMI 894 - HC - Income TaxAccrual of interest income - Hire Purchase Finance charges - whether should be assessable to tax on sum of Digits basis as against Equated Monthly Instalments basis regularly followed by the Appellant? - Tribunal held that the appellant is not entitled to maintain its book on the Sum of Digits method and offer the income on Equated Monthly Instalment Basis? - Held that:- We are in agreement with the reasoning of the Tribunal in this regard that when once the Revenue had accepted the character of the transaction as hire purchase transaction, the income that flows from the transaction has to necessarily follow the treatment that is given under the hire purchase agreement. Secondly, when the Revenue had not disputed the fact that on all the earlier years, the Revenue had treated the income as per the hire purchase agreement on EMI basis, there are no materials available as on record to show that following such method had really resulted in suppression of income, in other words, there was no true reflection of the income that has to be assessed under the Act. This Court in Commissioner of Income Tax v. Ashok Leyland Finance Ltd [2012 (7) TMI 590 - Madras High Court] came to the conclusion that the EMI method followed by the assessee for the purpose of tax did not show any suppression of income. This decision of this Court has not been challenged by the Revenue. On the contrary, the same has been followed by this Court in respect of the very same assessee for the subsequent assessment years, which we have already extracted supra. Thus no hesitation to hold that in the absence of anything to the contrary, the assessee's plea that tax should be determined on the basis of EMI method has to be accepted. The finding of the Tribunal on this score, therefore, deserves to be reversed. - Decided in favour of the assessee.
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