TMI Blog2005 (12) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... be a necessary concomitant in the year of change of system of accounting, what is more material is that the assessee had been consistently paying bonus on cash basis in the past after the end of the accounting period and the same modality was adopted in the year under consideration. Therefore, to state that this was payment relatable to earlier years is not absolutely correct. – order of tribunal is confirmed - - - - - Dated:- 1-12-2005 - Judge(s) : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J. - The Income-tax Appellate Tribunal, Ahmedabad Bench "C" has referred the following question under section 256(1) of the Income-tax Act, 1961 ("the Act") at the instance of the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer, at the stage of draft assessment, disallowed the amount of Rs. 71,700, namely, the provision made while allowing the deduction of Rs. 66,577 actually paid during the accounting period. The Inspecting Assistant Commissioner, while issuing directions under section 144B of the Act, directed the Assessing Officer to allow the provision of Rs. 71,700 and disallow Rs. 66,577, which was the amount actually paid, as according to the Inspecting Assistant Commissioner, the same being relatable to the calendar year 1979, could not be permitted to be deducted as the system of accounting was mercantile. The Assessing Officer, thus, while framing the assessment order, disallowed the sum of Rs. 66,577 actually paid as bonus during the year wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see-company. For the accounting year 1977, the bonus was paid in the calendar year 1978 by switching over to the cash system of accounting. Thereafter, the assessee-company had been claiming payment made on cash basis, namely, the bonus relatable to the immediately preceding accounting period was consistently being paid in the immediately next accounting period, i.e., after the end of the accounting year. During the year under consideration, because the assessee switched over from cash system of accounting to mercantile system of accounting, it appeared that the assessee had claimed double deduction : one on the basis of cash payment, and another on the basis of mercantile system of accounting, namely, the provision made. However, apart f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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