TMI Blog1999 (11) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... justification ? 2. Whether, on the facts and circumstances of the case, was the Tribunal correct in law in holding that the sum of Rs. 7,19,598 representing the cash assistance in respect of the last quarter of the previous year has accrued during the year and hence includible in the total income for the assessment year 1988-89 ? 3. Whether the Tribunal is correct in law and fact in not allowing the change in the method of accounting from mercantile to cash holding it as not a bona fide change when neither principle nor authority bars an assessee from substituting one method of accounting for another at his choice ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal is right in rejecting the change in the meth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by it. The assessee had not offered the said amount for taxation on the ground that the amount was not received during the previous year, but only in a subsequent year. It was claimed that in respect of cash incentive, it had changed its method of accounting from the mercantile system to cash system, and the amount was to be considered for assessment for the subsequent year, i.e., 1989-90. The Assessing Officer felt that the change in the method of accounting was not bona fide. Accordingly, the amount in question was included in the total income. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals) (in short "the CIT (A)"), who concurred with the Assessing Officer. In second appeal before the Tribunal, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of accounting was found to be not bona fide. The assessee was accounting for all other receipts and outgoings on due basis. It was noticed that there was no uncertainty regarding receipt of the cash incentive and that there would be no difficulty in getting the amount from the Government Departments. There was no justifiable reason for the assessee to account for the cash incentive on receipt basis deviating from the hitherto followed method of accounting. Accordingly, the view of the Assessing Officer as well as the Commissioner of Income-tax (Appeals) was affirmed by the Tribunal. Learned counsel for the assessee submitted that the Tribunal has fallen into grave error by observing that there was frequent change. Only for the previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it cannot be said that the assessee had followed the earlier method regularly. In view of the intermediary change in the method of accounting, such a case will fall under section 145(2). Frequent switching over from one method to another goes against the concept of method of accounting regularly followed. In respect of the self-same source of income the assessee had adopted a changed method of accounting in different years. There is, therefore, no regularity in following the method of accounting. Additionally a factual conclusion has been arrived at by the Tribunal that change in the method of accounting was not bona fide. The conclusion is factual. The authorities were, therefore, right in refusing to accept the assessee's stand. The q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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