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TMI Blog2014 (12) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... counting followed - though the assessee might have not withdrawn the deposits and interest but the banks had duly credited the interest upto 31.3.95 because it is mandatory for the banks to provide for interest payable or received on Mercantile System and therefore, the assessee cannot say that the interest upto 31.3.95 was not credited bank on such deposits - assessee has not furnished any evidence to the contrary except the claim the interest was offered for taxation in the AY 1996-97 – thus, the interest accrued on Fixed Deposits up to 31.3.95 was legally assessable in the hands of the assessee company in AY 1995-96 and AO was quite justified in assessing the same on accrual basis in AY 1995-96 – thus, the order of the Tribunal is upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had shown nil income as per Profit Loss account. However, its balance sheet was showing a paid up capital of ₹ 1,22,50,000/- and share application money of ₹ 1,27,93,600/-. In addition to this, an amount of ₹ 71,25,000/- was appearing under the head of share premium account . On the asset side the assessee had shown an amount of ₹ 1,07,22,600/- under the head Banker's to issue Balance . Therefore, the assessee was asked to explain as to whether the balance of ₹ 1,07,22,600/- appealing under the head Bank's to Issue balance was inclusive of interest earned on this deposit or not. The assessee company, gave his explanation. However, the Assessing Officer did not agree with the assessee's conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxed in accordance with the system of accounting followed. 11. So far as the present case is concerned, though the assessee might have not withdrawn the deposits and interes thereon but the banks had duly credited the interest upto 31.3.95 because it is mandatory for the banks to provide for interest payable or received on Mercantile System and therefore, the assessee cannot say that the interest upto 31.3.95 was not credited bank on such deposits. 12.1. So far as the assessee's claim that it was following cash system of accounting is concerned, I am of the opinion, it is absolutely a false claim. Firstly because the assessee itself had in the relevant part of the return (as stated by the AO in para 2 of the assessment order) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the Company has a branch office, whether in or outside India, the Company shall be deemed to have complied with these Articles, if proper books of account relating to the transactions effected at the branch office are kept at the branch office and proper summarized returns, made upto date at intervals of not more than three months, are sent by the branch office to the Company, at its office or other place in India, at which the Company's Books of Account are kept as aforesaid. The Books of Account shall give a true and fair view of the state of the affairs of the company or branch office as the case may be and explain its transaction. The Books of Account and other Books and papers shall be open to inspection by any Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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