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TMI Blog2011 (7) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of this court : "(i) Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in deleting the addition of Rs.2,06,23,367 made by the Assessing Officer by treating the deposits received by the assessee against settlement pending as income of the assessee despite the fact that the assessee is maintaining its accounts on cash basis. (ii) Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in deleting the addition of Rs. 2,06,23,367 made by the Assessing Officer accepting the method of accounting followed by the assessee which results in postponement of its tax liability as per the discretion of the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd unless the accounts were finally settled with the defaulting borrowers, it was difficult to apportion the interim receipts between the principal and the interest. 5. Though the appeal filed by the Revenue was partly allowed by the Tribunal, vide the order dated October 15, 2010, on other aspects, qua the issue under discussion it put its seal of affirmation on the observations of the Commissioner of Income-tax (Appeals), noticed above. 6. Still aggrieved, the Revenue is in appeal before us. 7. We have heard learned counsel for the appellant and have perused the record. 8. Learned counsel for the Revenue submitted that the Commissioner of Income-tax (Appeals) as well as the Tribunal were not justified in de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of final settlement had not been done, the bifurcation could not be made. Therefore, the amounts were lying credited in the relevant year of final settlement as per the accounting policy regularly followed by the assessee regarding the amount received from the defaulting borrowers for bifurcation into the principal and the interest thereon. The Commissioner of Income-tax (Appeals) has observed that unless the accounts are finally settled with the defaulting borrowers, it is difficult to apportion the interim receipts between the principal and the interest. The Commissioner of Income-tax (Appeals) has also recorded a finding that such accounting system has been regularly followed by the assessee. In our considered opinion, having regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the defaulting borrowers, it is not possible for the appellant to bifurcate interim payments made by the defaulting borrowers between the principal and the interest till such time the settlement is finally reached. Considering the totality of circumstances, we hereby affirm the order of the Commissioner of Income-tax (Appeals) and find no justification for the addition made by the Assessing Officer. Accordingly, the ground of appeal raised by the Revenue is dismissed'." 11. The Tribunal had concluded that till the final settlement of the accounts was made with the defaulting borrowers, it was difficult to bifurcate the interim payments which had been made by the defaulting borrowers between the principal and the interest amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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