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TMI Blog1994 (7) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer, while the assessee used to issue bills for the dalali, they were not accounted for in the books of account of the assessee. From these facts, the Assessing Officer had also inferred that the assessee had concealed the particulars of its income. The explanation of the assessee was that it had followed cash system of accounting and dalali income was accounted for only on cash basis. The Assessing Officer, however, did not feel satisfied with the explanation and made the impugned additions. When the matter went before the learned CIT(A) he also took the view that the system followed by the assessee was defective as it did not give the real picture of the income earned during the year especially when the assessee was not sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Assessing Officer on page 3 of his order is that he wants the assessee to change his system of accounting from cash to mercantile. The learned Counsel argued that according to law the option of adopting the particular system of accounting lay with the assessee and not with the Assessing Officer, particularly when the assessee was regularly following that system of accounting from year to year. Similarly, with reference to observations of the learned CIT(A) on page 3 of his order the learned counsel submitted that these findings were factually wrong. He claimed that the assessee could furnish detailed information from the subsidiary book regarding how much amount was due from each customer. He pointed out that not even a single example ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leted. 3. The learned Departmental Representative argued that from the language of the orders of the authorities below it appeared that the assessee had shown receipts on cash basis but payments were accounted on mercantile basis which meant that the assessee had not maintained the accounts on a regular cash basis. 4. We have carefully considered the rival submissions and have perused the orders of authorities below as well as the material on record. In our opinion, the arguments given by Shri Ranka are very valid and we also endorse that perhaps the authorities below have failed to appreciate how accounts have to be maintained on cash basis. We further agree that the arguments of the learned Departmental Representative are not substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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