method of accounting

The assessee is a firm and engaged in business of financing and follows cash system of accounting. It gave a loan to a company on interest. The borrower while crediting the interest deducted TDS and issued TDS certificate. The assessee claimed the credit of TDS without offering the corresponding income to tax . The AO disallowed the claim of the assessee .The CIT (A) allowed the appeal of the assessee- ITO Business Ward –II (4) v. M/s Shri Anupallavi Finance & Investm.. Full Article

Method of Accounting regularly followed by the taxpayer which was accepted by the Tax Officer in past cannot be rejected in future years without expressing the dissatisfaction about the correctness or completeness of the accounts of the taxpayer Rec Full Article

We find that at the time of survey the sample processing was carried out and according to the sample processing, the bi-products consists of chuni, dust, waste, etc. which comes to 8.46% and the books of account reflected the waste and bi-products at 10%. We find from the facts that out of 100 kg. of mug the production of mugdal is 90 kg. and bi-product is 10 kg, which is called `kurma or chuni'. Kurma is bi-product and not a waste or process loss. Kurma is sold in open .. Full Article

We have heard both the sides in detail. Thrust given by the C1T(A) on the mens rea reflected in the conduct of the assessee does not survive with usual force, since the judgment of the Hon'ble Supreme Court in the case of Union of India & Others Vs. Dharmendra Textiles Processors & Ors., 306 1TR 277. The Supreme Court has held in the said case that willful concealment is not essential for attracting civil liability of penalty under Section 271(1 )(c) of the Act. The othe.. Full Article

In the instant case, learned counsel for the Revenue is not in a position to demonstrate or satisfy us that due to the change of accounting method adopted by the respondent/assessee , which is permissible in law as per the ratio laid down in (i) CIT v. Matchwell Electricals (I.) Ltd. (2003)263 ITR 227 (Bom) and (ii) Hela Holdings Pvt. Ltd. v. CIT (2003) 263 ITR 129 (Cal), the Revenue suffered any loss or such a change of methodology attracts tax evasion. Concededly, ther.. Full Article

In this article, the proposed amendments by The Finance (No. 2) Bill, 2009 relating to sections 56(2), 57, 145A, 271(1) Explanation 5A and 281B, are briefly discussed. These amendments proposed in the Finance (No. 2) Bill, 2009, are aimed towards rationalizing the provisions of the Income-tax Act, 1961 (“the Act”) in order to bring out the true and correct intention of the legislature for enacting the above provisions. Full Article

We do not find any error in the approach of the authorities below. Merely because the interest was debited in the books of accounts maintained on mercantile basis would not mean that the interest had become due and accrued because admittedly the interest liability would become due not during the relevant previous year but only for the first time on 18.11.1996. Full Article

SUMMARY OF CASE LAW Once the goods have been purchased, the invoices raised and the purchase considerations are accounted for in the books of the assessee, the expenditure can be said to have been incurred as per the method of accounting – mercantile basis – followed by the assessee. CASE LAW DETAILS Decided by: HIGH [...] Full Article