TMI Blog1990 (12) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ated, the facts are that, in the past, the assessee was debiting to the profit and loss account of the year the bonus relating to the immediately preceding year that was actually paid during the year. In other words, the assessee was not making any provision for payment of bonus in the accounts of the year to which the bonus related. Instead, it used to debit the bonus actually paid during the year to the profit and loss account of the year even though the bonus related to the working of an earlier year. In short, the assessee was following the cash system of accounting so far as this item of expense was concerned. During the year under consideration, the assessee debited the amount actually paid during this year to the profit and loss acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the Income-tax Officer to accept the method of accounting adopted by the assessee and allow the deduction claimed by the assessee in respect of the aforesaid provision for bonus relating to the year under consideration which has been made in the profit and loss account. The Department appealed to the Tribunal and contended that the Commissioner of Income-tax (Appeals) erred in his decision. On the other hand, the assessee supported the order of the Commissioner of Incometax (Appeals). The Tribunal considered the contentions of both the parties as well as the facts on record and held as follows: We find force in the contentions raised for the assessee. We find that, in the printed accounts for the year under consideration, in item No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed as deduction, on payment basis. Besides, possible detriment to the Revenue is no ground for rejecting a bona fide change in the method of accounting followed consistently after the change. Hence, we uphold the decision of the Commissioner of Income-tax (Appeals) on this point and reject this ground. At the hearing before us, the contentions raised before the Tribunal had been reiterated. We have already extracted the findings of the Tribunal. The method of accounting for bonus has been changed from cash to mercantile in consonance with uniformity and in conformity with the general method of accounting. The assessee has been consistently following this system in respect of bonus liability in the subsequent assessment years. Neith ..... X X X X Extracts X X X X X X X X Extracts X X X X
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