TMI Blog2008 (11) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee - 269 of 2004 - - - Dated:- 10-11-2008 - MRS. PRABHA SRIDEVAN and K. K. SASIDHARAN JJ. Ms. Pushya Sitaraman for the appellant. Venkatnarayanan for M/s. Subbaraya Aiyar for the respondent. JUDGMENT The judgment of the Court was delivered by MRS. PRABHA SRIDEVAN J. - In the tax case, though three questions were raised, the tax case was admitted only on the following question of law: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that a sum of Rs. 7,93,423 being the interest accrued but not due should (not ?) be included in the taxable income of the assessee, especially when it is following mercantile system of accounting ?" 2. The learned senior standin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s had been treated as income accrued "but not due" and the learned counsel referred to the relevant page in the typed set of papers. Therefore, the learned counsel submitted that the previous order does not warrant interference especially because it has been decided in favour of the assessee in CIT v. Tamilnadu Mercantile Bank Ltd. [2007] 291 ITR 137 (Mad). 5. We have gone through the materials on record. The Assessing Officer had rejected the claim for exclusion of interest accrued on the ground that though the interest had accrued in the earlier year, it was only received during the current year. The Assessing Officer also dealt with the interest income on the principle of accrual and confirmed the assessment order. The Tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. In other words, if the assessee is maintaining cash system of accounting, the aforesaid proviso would not apply. The legislative intent is that when the assessee is maintaining the cash system of accounting income by way of interest on securities will have to be charged to tax only when the assessee actually receives the interest and not on the date on which interest on such securities might become due.... In the instant case, there is no change in the method of accounting by the assessee. The Assessing Officer accepted the method of accounting followed by the assessee during the earlier assessment years, but, without any change in circumstance, changed the method of assessment during the financial years in question, which, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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