TMI Blog2016 (4) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... e mercantile system of accounting. Tribunal further referred to the fact that the various resolutions which were passed by the company as well as the communication exchanged between the parties would establish on facts that interest has been waived. Further on facts it holds that there is no reason to disbelieve the resolution passed by the Respondent-Assessee waiving interest. The Tribunal further adverted to the fact that subsequently, M/s. Marketing & Brand Solutions (I) Pvt. Ltd. had amalgamated with the Respondent-Assessee which would also establish that the debentures issuing company was in serious financial difficulties which was incidentally a group company of the Respondent. The decision rendered by the Tribunal in the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Marketing Brand Solutions (I) Pvt. Ltd. On 20th May, 2004 M/s. Marketing Brand Solutions (I) Pvt. Ltd. in response to a demand for interest from the Respondent-Assessee requested waiver of interest on the debentures as it were facing financial difficulties. In fact on 31st May, 2004 at a meeting of debenture holders waiver of interest on the debentures till 31st March, 2010 was approved. Consequent to the above, the Board of Directors of the Respondent-Assessee on 8th June, 2004 also passed a Resolution to waive interest on the debentures of M/s. Marketing Brand Solutions (I) Pvt. Ltd. upto 31st March, 2010 and also duly informed the same to M/s. Marketing Brand Solutions (I) Pvt. Ltd. 4. In the two assessment years under conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able certainty is lacking, the revenue recognition is to be postponed to the extent of uncertainty involved. In terms of the guidance note, it is appropriate to recognize revenue in such cases only when it becomes reasonably certain that ultimate collection will be made. (D) Nonrecognition of income on the ground that the income had not really accrued as the realisability of the principal outstanding itself was doubtful, is legally correct under the mercantile system of accounting, when the same is in accordance with ASI notified by the Government. (E) It is one of the fundamental principles of accounting that, as a measure of prudence and following the principle of conservatism, the incomes are not taken into account till the poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. had amalgamated with the Respondent-Assessee which would also establish that the debentures issuing company was in serious financial difficulties which was incidentally a group company of the Respondent. The decision rendered by the Tribunal in the impugned order is a decision on facts and nothing has been shown to us which would warrant interference by this Court on account of any finding being perverse or arbitrary. 7. We were informed at the hearing that for the Assessment years prior to A.Y. 2007-08 no addition was sought to be made by the Revenue on account of notional interest. 8. The view taken by the Tribunal in the impugned order is a possible view. In these circumstances, the questions raised for our consideration d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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