TMI Blog2019 (7) TMI 1740X X X X Extracts X X X X X X X X Extracts X X X X ..... our of the appellant assessee. - TCA.Nos.2097 to 2099 of 2008 - - - Dated:- 30-7-2019 - THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM And THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN For the Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For the Respondent : Mr.G.Baskar COMMON JUDGMENT [Judgment of the Court was delivered by T.S.Sivagnanam, J.] These appeals by the Revenue under Section 260 A of the Income Tax Act, 1961 (hereinafter referred to as the Act ) are directed against the common order dated 08.04.2008 in I.T.A.Nos.559 571(Mds)/2005 and 1118(Mds)/2007 for the assessment year 2001-02, 1999-2000 and 2000-2001. 2.We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court in the case of Southern Technologies Ltd. vs. Joint Commissioner of Income Tax, Coimbatore [(2010) 187 Taxman 346 (SC)] and submitted that the questions framed for consideration are answered in favour of the revenue. 6.After hearing the learned counsels for the parties and carefully perusing the materials placed on record. We find that the decision in the case of Vasisth Chay Vyapar Ltd will fully apply to the facts and circumstances of the present case. To be noted that the High Court of Delhi in the case of Vasisth Chay Vyapar Ltd. took note of the decision in the case of Southern Technologies Ltd. which was relied on by the revenue and while interpreting the provisions of the Income Tax Act and the RBI Directions hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfy the relevant conditions stipulated therefor under the Act. To that extent, it was observed that the Prudential Norms do not override the provisions of the Act. However, the Apex Court made a distinction with regard to Income Recognition and held that income had to be recognized in terms of the Prudential Norms, even though the same deviated from mercantile system of accounting and/or section 45 of the Income Tax Act. It can be said, therefore, that the Apex Court approved the real income theory which is engrained in the Prudential Norms for recognition of revenue by NBFC. ............. Therefore, subject to the requirements of the IT Act, profits to be assessed under the IT Act have got to be Real Profits which have to be compute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It is well settled that the Accounting Policies followed by a company can be changed unless the AO comes to the conclusion that such change would result in understatement of profits. However, here is the case where the AO has to follow the RBI Directions 1998 in view of Section 45Q of the RBI Act. Hence, as far as Income Recognition is concerned, Section 145 of the IT Act has no role to play in the present dispute. 19. We have also noticed the other line of cases wherein the Supreme Court itself has held that when there is a provision in other enactment which contains a non-obstante clause, that would override the provisions of Income Tax Act. TRO Vs. Custodian, Special Court Act (supra) is one such case apart from other cases of dif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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