TMI Blog2015 (3) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. - Tax Case (Appeal) No.1536 of 2008 - - - Dated:- 17-3-2015 - R.Sudhakar And R.Karuppiah JJ. For the Appellant : Mr.R.Venkatanarayanan For Respondent : Mrs.Vardhini Karthik Judgment (Delivered by R.SUDHAKAR,J.) This Tax Case (Appeal) is filed by the assessee as against the order dated 14.07.2006 made in I.T.A.No.1927/2002 on the file of the Income Tax Appellate Tribunal Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case are not in dispute. The whole case revolves around the hire purchase agreement entered into between the appellant and the purchasers in respect of purchase of vehicle on hire purchase basis and to make payment in equated monthly instalments (EMI method). While computing income for the purpose of computation of tax, the appellant/assessee followed Equated Monthly Instalment method, whereas, the assessee maintained the books of accounts on Sum of Digits Method. While completing the assessment, the Assessing Officer was of the view that it was not permissible for the assessee to compute its income using one method in its day to day accounts and to use another method for computing income chargeable to tax. In so holding, the Assessing Officer disallowed the claim of the assessee and brought to tax the differential amount under the Sum of Digits Method. 5. Aggrieved by the said order of the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who by following the decision of the Income Tax Appellate Tribunal, Hyderabad in the case of Commissioner of Incometax Vs. Nagarjuna Investment Trust Ltd. reported in 65 ITD 17 dismissed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt different methods of accounting one for the purpose of maintaining the books of accounts and the other for the purpose of filing return of income. Once the assessee is following one system of accounting, it is not permissible for the assessee to follow another system of accounting for the purpose of filing return of income. She further submitted that by virtue of the EMI method, the actual income on the interest component did not suffer tax and therefore, such method should not be allowed to be adopted. 10. Heard learned counsel appearing for the appellant/assessee and the learned standing counsel appearing for the Revenue and perused the materials placed before this Court. 11. In the case of Commissioner of Income Tax v. Ashok Leyland Finance Ltd., (2012) 210 Taxman 95 (Mad), identical questions have been raised, which are as follows: 1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the assessee is justified in following the Equated Monthly Instalment method to account the finance charges for the income tax purposes only? 2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the entire transaction is hire purchase transaction and not a loan transaction and the same methodology is adopted. In the case of Commissioner of Income Tax v. Ashok Leyland Finance Ltd., (2012) 210 Taxman 95 (Mad), on fact, finding has been arrived at paragraph No.17 which may be relevant for the purpose of deciding this case, which reads as follows: 17. A perusal of the order of the Tribunal clearly showed that the nature of the business transaction conducted by the assessee was one of a hire purchase giving vehicles on hire purchase and the assessee had not given any finance or loan for the purchase of vehicle. The terms of the agreement thus clearly point out that the hire purchaser shall not have any proprietary right or title until he exercised, in writing, his option to purchase, as provided in the agreement by payment of the whole amount due under the agreement or in term thereof. A reading of the agreement shows that the principal and finance charges for the entire period of contract had been shown separately in the schedule attached to the agreement. The total amount of hire purchase charges, namely, principal and finance charges, were divided equally by number of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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