Hypothetical Income Not Taxable Under Mercantile System: ITAT Chennai

ACIT Vs Suryanarayana Iyer (ITAT Chennai) ITAT Chennai held that although the assessee company was following the mercantile system of accounting, only real income could be brought to tax. Hypothetical income cannot be taxed. Hence, appeal of revenue dismissed. Facts- The assessee is an individual who derives income providing legal assistance to lawyers, through his sole proprietary-ship business in the name and style of “Cyber Law Journal”. The RoI was selected for scrutiny and the AO noted that the assessee had entered into an agreement with M/s.Lexis Nexis Butterworths India on 19.05.201...