TMI Blog2002 (12) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... w in holding that the export duty drawback and cash assistance from the Government is assessable in the hands of the assessee on receipt basis and not on accrual basis and consequently holding that the addition of Rs. 2,26,227 and Rs. 5,34,255 made by the Income-tax Officer are not warranted?" - we answer the above question in the affirmative, i.e., in favour of the assessee and against the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis and not on accrual basis and consequently holding that the addition of Rs. 2,26,227 and Rs. 5,34,255 made by the Income-tax Officer are not warranted?" Facts: The assessee is a public limited company. It is engaged in the business of manufacturing electrical appliances. It follows the accounting year ending 30th September. The assessee is also engaged in exporting its products. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egularly, mercantile system of accounting. The Assessing Officer held that the assessee cannot maintain mixed system of accounting for different types of income. Therefore, the assessee's claim of increase in the loss by Rs. 21,26,227 on account of change in the method of accounting was rejected. Being aggrieved, the assessee went in appeal to the Commissioner of Income-tax (Appeals). The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the source of the income, namely, business income. He contended that the asses5ee has continued with mercantile system of accounting for all other receipts except cash assistance and duty drawbacks which was not permissible. Findings: We do not find any merit in the above argument advanced on behalf of the Department. The Commissioner of Income-tax (Appeals) has recorded a finding of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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