9911796707
TMI Blog1993 (1) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... ground :--- " On the facts and circumstances of the case, the CIT (Appeals) has erred in law and on facts in deleting the addition of Rs. 13,25,662 on account of accrued commission. " The main source of income of the assessee appears to be commission received from M/s. Gedore Tools India (P.) Ltd., which is now described as Jhalani Tools (India) Pvt. Ltd. The accounting period of the assessee is said to be July to June. The appellant had been disclosing income from commission on accrual basis and, was, therefore, following the mercantile system of accounting. However, the assessee adopted cash system of accounting in the previous year relevant to the assessment year 1985-86. It was explained by the assessee that the reason for this chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use after the event of accrual, the assessee neither decides to treat it as a bad debt nor claims deduction u/s. 36(2) of the Income-tax Act, 1961. In that case, the State Bank of Travancore showed certain amount of interest in a separate account called, the "Interest Suspense Account". This amount of interest was charged by the bank on advances which had become extremely doubtful of recovery and which the bank had termed "sticky advances". The amount of interest was debited in the accounts of the concerned parties but it was not carried to the Profit and Loss Account but to the Interest Suspense Account. The bank claimed that having regard to the bad and deteriorating financial conditions of the parties concerned, the recovery of even the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change it thereafter. 16. The learned counsel for the assessee has also relied upon CIT v. West Coast Paper Mills Ltd. [1992] 193 ITR 349 (Bom.) wherein also the method of accounting was changed and it was held that if the method is followed regularly and is bona fide, there does not appear to be any reason why change should not be allowed. 17. It has been urged before us that the Delhi High Court has also in an Income-tax Reference No. 37 of 1972 decided on 9-11-1981 expressed the view that if there was a bona fide change in the method of accounting, the Deptt. must accept that change. In CIT v.UnionLand Building Society (P.) Ltd. [1972] 83 ITR 794 (Bom.) also the hybrid system of accounting in the year of change was permitted. 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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