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TMI Blog2009 (2) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Rs.21,600 claimed by the assessee under the head 'Finance commission' which did not pertain to the accounting period relevant to the assessment year under reference? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in not upholding the disallowance of Rs.21,600 out of the total liability of Rs.43,200 claimed by the assessee as having accrued during the year on account of hire purchase commission? (iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in not upholding that the liability of Rs.43,200 claimed by way of accrued hire purchase commission was in reality the amount of interest projected over the period of hire purchase agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had purchased trucks, trolleys, etc., under an agreement with the finance companies and, as per the agreement for hire purchase, the assessee was to make payment of the hire purchase amount and finance commission in instalments. As per the accounting system adopted by the assessee, the entire amount payable towards finance commission as per the hire purchase agreement was claimed in the assessment year in which such hire purchase agreement was entered into irrespective of the fact that the actual payment was even made in the following years. The issue raised by the Revenue is as to whether the entire amount towards finance commission can be deducted or can be claimed in the assessment year in which hire purchase agreement was entered int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though certain reasons have been given, but they ate not germane to any legal proposition and now looking to the amount involved in these cases and the principle laid down by the hon'ble apex court in the case of Bilahari investment P. Ltd. [2008] 299 ITR 1 the reference can be answered. The relevant paragraph 20 of the judgment in the case of Bilahari Investment P. Ltd. [2008] 299 ITR 1 (SC) is quoted hereunder (page 8): "As stated above, we are concerned with the assessment years 1991-92 to 1997-98. In the past, the Department had accepted the completed contract method and because of such acceptance, the assessees, in these cases, have followed the same method of accounting, particularly in the context of chit discount. Every assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the question whether such an accounting system was permissible or not, is not before us. Further the Department itself was permitting the said accounting system according to which, the assessee was accounting the entire finance commission in the year of hire purchase itself irrespective of the fact that the instalment pursuant to the hire purchase agreement was actually paid in the subsequent years. Assessment on the aforesaid basis was continued for years together and it is only for the assessment year 1981-82 that the said system was not accepted by the Department. Thus, looking to the aforesaid facts and circumstances and also the judgment of the hon'ble apex court in the case of Bilahari investment P. Ltd. [2008] 299 ITR 1, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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