TMI Blog2006 (2) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... as ₹ 1,94,92,229 and the book loss apportioned between the partners was ₹ 41,02,347. While the expenditure was accounted for on an accrual basis, receipts were disclosed only on cash basis and no work-in-progress as at the beginning of the year or at the end of the year was disclosed. 2. The Assessing Officer therefore estimated the closing work-in-progress at ₹ 18,73,468 and the opening work-in-progress at ₹ 16,60,034 and added the difference between these two figures of ₹ 2,13,434 to the total income on account of work-in-progress. Assessee aggrieved by the order of the assessing authority took up the matter in appeal before the Commissioner of Income-tax (Appeals), Kochi and had pointed out that for the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure, for computing the true profits of the year the work-in-progress must be taken into account. Counsel placed reliance on the decisions of the Supreme Court in P.M. Mohammed Meerakhan v. CIT [1969] 73 ITR 735, CIT v. A. Krishnaswami Mudaliar [1964] 53 ITR 122 and CIT v. British Paints India Ltd. [1991] 188 ITR 44 1. 5. The accounting process is an individual function of the assessee. Assessee is free to follow its own method of accounting like cash system of accounting, mercantile system of accounting or hybrid system. But when the method of accounting adopted by the assessee does not disclose the true income of the assessee it is open to the Assessing Officer to adopt any method so as to reach at the true income of the assessee. Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Officer to act in exercise of hisstatutory power for determining what, in his opinion, would be the correct income. 7. We may also indicate in Geo Tech Construction Corpn. s case (supra ), the Division Bench of this Court had no occasion to refer to the decisions of the Apex Court mentioned above and held as follows : The Tribunal felt that unless a situation emerges that profits disclosed by the assessee as a result of his own method of accounting are so unreasonable and patently unacceptable leading to the situation of rejection of books of account, estimation and its consequent addition on the basis of valuation of work-in-progress would not get any justification on factual basis. The Tribunal held that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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