TMI Blog1982 (1) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... g for our answer the following four questions of law: " 1. Whether the Income-tax Appellate Tribunal is justified in considering and deciding the ground of method of accounting suo motu which has neither been taken by the Department in the memorandum of appeal nor at the time of hearing ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in setting aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e previous year. The question, therefore, was whether the amounts of sales tax and refugee tax could be allowed as deductions. The assessee's contention was that it maintained accounts according to mercantile system and was, therefore, entitled to the deduction of the amounts of sales tax and refugee tax. The ITO did not accept this contention on the finding that the mode of accounting adopted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another part of his business or another class of customers ; and if he employs such different methods regularly and consistently, the profits would have to be computed, in accordance with the respective methods (See Kanga and Palkhivala's Income-tax, 7th Edn., Vol. 1, p. 869). The crucial question, therefore, was whether the assessee maintained accounts in respect of sales tax on cash basis or on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases are distinguishable, because it was not argued in them that the assessees had maintained their accounts according to mercantile system. For the reasons stated above, we answer the questions referred as follows : Q. No. 1 : The Tribunal was justified in considering the question of method of accounting. The Tribunal, however, did not decide that question properly as it did not examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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