Assessee can adopt hybrid system for income computation provided the same followed consistently

Brief of the case:

The Hon’ble Kerala HC in the case of Kerala Kamudi P. Ltd. held that the assessee is allowed to follow hybrid system of accounting for different nature of transactions provided the same is followed consistently and income can be deduced from such accounting.

Facts of the case:

• The assessee company is engaged in publishing and selling newspaper named ‘Kerala Kaumudi’. The assessee is following mercantile system of accounting. However, for the purpose of accounting income from sale of newspaper and advertisement income the assessee accounted the same on receipt basis.

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