9911796707
TMI Blog2015 (3) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2004-05, we hold that expenditure incurred on purchase of software should be allowed as revenue expenditure. - Decided in favour of assessee. Amortization of investments under HTM category - Held that:- Issue requires to be examined by the AO afresh in the light of the ultimate decision on the claim of assessee for deduction for amortisation of investments in A.Ys. 2001-02, 2002-03 and 2003-04. If, consequent to appellate orders, amortisation is allowed as deduction in those assessment years, then the assessee will not be entitled to claim deduction in the present assessment year, which is stated to be the year in which the securities were sold. The AO is therefore directed to verify this aspect and consider the claim of assessee afresh, after affording the assessee an opportunity of being heard. - Decided in favour of assessee for statistical purposes. Expenditure incurred on Employee Stock Options (ESOP) disallowed - Held that:- As relying on order of Tribunal for A.Y. 2004-05. in assessee's case wherein the claim of the assessee for deduction has to be allowed in principle it would be just and appropriate to direct the AO to consider the claim of assessee for deduction afr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are without any basis. As has been observed by the Hon'ble Supreme Court in the case of Bilahari Investments Pvt. Ltd. (2008 (2) TMI 23 - SUPREME COURT), the department has to show that change in method of accounting results in distortion of profits. In the absence of such a finding, it has to be necessarily concluded that the change of accounting is revenue neutral. We are of the view that change in method of accounting is bonafide. We therefore hold that the claim of assessee deserves to be accepted - Decided in favour of assessee. Diminution in value of investment under AFS/HFT categories - CIT(A) deleted addition - Held that:- CIT(A) was correct to as concluded the Assessee is entitled to value all the investments, which are part of the trading stock at cost price or market value, whichever is lower under section 145 of the Act. Therefore, the total depreciation in respect of the investment amounting to 16,99,68,583/- was claimed and that the AO was not correct in adding back the appreciation. - Decided in favour of assessee. Broken period interest - CIT(A) deleted addition - Held that:- The assessee has been following the method of offering interest on securities to tax on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nying exemption u/s. 10(23G). Sl. No. Party Amount 1 Gujarat Industries Power Co. Ltd. 1,15,25,477 2 Lanco Kondapalli Power Corpn. Ltd 46,26,609 3 Samalpatti Power Co. Ltd 3,06,988 4 BSES Kerala Power Ltd 72,44,263 5 Rajahmundry Express Way 56,52,800 6 Spectrum Power Generation Ltd 32,86,000 7 Samalpatti Power Co. Ltd 2,37,735 7. Even before CIT(Appeals), assessee was not able to file required certificates. 8. Before us, the limited request of the learned counsel for the assessee was hat the necessary approvals from the CBDT is available and will be provided to the Assessing Officer. He prayed that the order of the Assessing Officer may be set aside and the assessee allowed opportunity of providing the necessary approvals for grant of exemption u/s.10(23G) of the Act. We are of the view that it would be just and appropriate to set aside the addition made by the Assessing Officer in this regard and allow opportunity to the assessee to produce the required certificate which will enable the assessee to claim exemption u/s.10(23G) of the Act. For statistical purpose, the ground of appeal is treated as allowed. 9. Ground No.5 reads as follows:- "5. Revenue ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without recording a finding as to the nature of the purchase, its durability and its application before deciding the issue ? The Hon'ble High Court on the aforesaid question of law held as follows : "9. The second substantial question of law relates to application of the amount utilized for projects of Software in a sum of ₹ 33,14,298/-. The Tribunal on consideration of the material on record and the rival contentions held, when the expenditure is made not only once and for all but also with a view to bringing into existence an asset or an advantage for the enduring benefit, the same can be properly classified as capital expenditure. At the same time, even though the expenses are once and for all and may give an advantage for enduring benefit but is not with a view to bringing into existence any asset, the same cannot be always classified as capital expenditure. The test to be applied is, is it a part of company's working expenses or is it expenditure laid out as a part of process of profit earning. Is it on the capital layout or is it an expenditure necessary for acquisition of property or of rights of a permanent character, possession of which is condition on carrying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his submission before the CIT (A). In other words, the fact that the nature of the expenses as one being licence fees for using MS office and MS windows was not disputed by the Assessing Officer. He also pointed out that the AO did not dispute the contention before CIT(A) that the Assessee had not made double deduction once in the profit and loss account and again in the computation of total income nor has the Assessee claimed depreciation on the capitalized value of the software expenditure incurred on purchase of application software. According to him therefore the claim of the Assessee had to be allowed. The learned DR relied on the order of the CIT(A) and further submitted that the issue may be set aside to the AO for a consideration afresh in the light of the submissions made by the Assessee before the Tribunal. 21. We have considered the rival submissions and are of the view that in the light of the submissions before CIT(A) and the remand report of the AO before CIT(A), it is clear that the revenue does not dispute the fact that there was no double claim of expenditure either in the form of a debit in the profit and loss account and thereafter a deduction claimed in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HTM category disallowed in asst. year 2001-02 & 2002-03 - ₹ 3.51 or. and pertaining to asst. year 2003-04 - R.s.1.74 cr. 12.1 The above two claims for a deduction of ₹ 5,26,36,981/- are not allowed presently as the assessee is in appeal against the above adjustments. The claim of the assessee would be considered u/s. 154 as and when the appeal is dismissed on these issues or it withdraws its claim on these issues and files a letter suitably. An amount of ₹ 5,26,36,981/- Is therefore disallowed and is added back." 16. The CIT(Appeals) concurred with the view of AO. 17. Aggrieved by the order of CIT(A), assessee has raised ground No.6 before the Tribunal. 18. At the time of hearing, it was brought to our notice by both the parties that identical issue was also considered by this Tribunal in assessee's own case for A.Y. 2004-05 (supra) and on the issue of amortisation of premium paid on securities under HTM category, the Tribunal held as follows:- "06. Ground no.2 raised by the assessee reads as follows : "2. Amortisation of investment held under "Held to Maturity" category - ₹ 2,90,77,263/- : Learned CIT (A) has erred in law and on fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing company which are categorized as HTM are in the nature of investments and cannot be treated as stock-in-trade and the claim of amortization of the assessee was disallowed. Aggrieved by the order of the CIT (A), assessee has raised ground no.2 before the Tribunal. 10. At the time of hearing of the appeal it was brought to our notice that similar issue had come up for consideration in assessee's own case and this Tribunal upheld the plea of the Assessee for deduction on account of amortization of premium paid of securities held in HTM Category. The following were the relevant observations of the Tribunal in ITA No.443/Bang/2012 for AY 02-03 order dated 14.8.2013: "10. We have heard the rival submissions. The issue raised by the assessee in ground No.2 is no longer res integra and has been decided by this Tribunal in the case of M/s. Sir M.Visweswaraya Cooperative Bank Ltd. Vs. JCIT ITA No.1122/Bang/2010 for AY 07-08 order dated 11.5.2012. The following were the relevant observations of the Tribunal: "03. Let us first take up the issue relating to amortization of premium on investment in government securities. Relevant grounds read as under : " i) The learned Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax (Appeals) had failed to see the reason that a issue similar to that of the present one had been allowed by various benches of the Hon'ble Tribunals, namely : • Catholic Syrian Bank Ltd., v. ACIT - Cochin (2010) 38 SOT 553 ; • Khanapur Coop.Bank Ltd., v. ITO in ITA.141/PNJ/2011 (Panaji); • Corporation Bank v. ACIT, M'lore in ITA.112/Bang/2008 (Bang) The learned counsel also placed reliance on Board's Instructions No.17 of 2008(vii) and pleaded that the claim of the assessee be allowed as the assessee had the powers to debit in its P&L account a sum of ₹ 29,02 lakhs of amortization of premium. 07. Per contra, the learned DR was unable to controvert to the submissions of the learned counsel for the assessee. 08. We have carefully considered the rival submissions and perused the relevant facts and materials on record. We have also considered the findings of the various benches of the Tribunal, as under : (i) Catholic Syrian Bank Ltd v. ACIT - (2010) 38 SOT 553 (Coch) : An identical issue to that of the subject matter under consideration had arisen before the Cochin Bench. After analyzing the issue in depth, the bench has observed that with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e redeemed, respondent will be entitled to get only face value. Consequently, the loss arising on account of purchase at market value is written off in instalments by spreading over the same equally for every year until date of maturity. We are of the vie hat the Tribunal rightly upheld the assessee's entitlement to write-off of loss in instalments. Consequently the departmental appeal is dismissed." 12. In view of the aforesaid decisions rendered on identical issue, we are of the view that the claim of the assessee ought to be allowed. Accordingly, ground no.2 raised by the assessee is allowed." 19. Having considered the order of Tribunal and the facts of case for the year under consideration, we are of the view that the issue requires to be examined by the AO afresh in the light of the ultimate decision on the claim of assessee for deduction for amortisation of investments in A.Ys. 2001-02, 2002-03 and 2003-04. If, consequent to appellate orders, amortisation is allowed as deduction in those assessment years, then the assessee will not be entitled to claim deduction in the present assessment year, which is stated to be the year in which the securities were sold. The AO is there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) wherein it was held that such expenditure was allowable as revenue in nature. The CIT(A) however upheld the order of the AO. Aggrieved by the order of the CIT (A), assessee has raised ground no.10 before the Tribunal. 70. The issue raised by the assessee in ground no.10 has since been considered by the Special Bench of the ITAT Bangalore in the case of Biocon (2013) 35 Taxmann.Com 305 (Bangalore - Trib) (SB). The Special Bench in the aforesaid decision held that when an Assessee issues shares under an Employee's Stock Option Plan (ESOP) and claimed difference between market price and exercise price as deduction under section 37(1), spread equally over vesting period of years, on basis of SEBI Guidelines and accounting principles, the AO cannot disallow the same holding it to be contingent liability. It was further held that the mere fact that quantification is not precisely possible and time of incurring liability is not certain would not make an ascertained liability a contingent. The Special Bench further held that where liability in respect of ESOP is incurred at end of each year, which is quantified at end of vesting period when employees become entitled to exercise options, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in anticipation of enhanced wages. During the AY 2005-06, the Assessee made a further provision of ₹ 217,553,603 thereby the total provision amounting to ₹ 334,053,603. The Bank had created a provision for salary arrears totaling to ₹ 334,053,603 as tabulated below: Assessment Year Amount claimed as Provision Amount debited to the P&L account Amount actually paid Year of payment On payment Whether debited to P&L a/c 2004-05 116500000 116500000 Nil NA NA 2005-06 217553603 217553603 Nil NA NA 2006-07 Nil Nil 283813002 2006-07 No* Total 334053603 334053603 283813002 From the aforesaid it can be seen that the actual liability discharged by the Assessee in AY 06-07 was less than the provision made in AY 04-05 & 05-06. Excess provision of ₹ 5.021 Crores so made in the said two AYs was offered to tax under section 41(1) of the Act in AY 2006-07. According to the Assessee provision for liability on account of enhancement in wages was made on the basis of a bipartite agreement between the Indian Banks Association (IBA) and the Bank. The agreement was finalized and signed before finalization of accounts for the A Y 2005-06. 45. The claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be applied in the facts of the assessee's case. 50. The learned counsel for the assessee pointed out that the excess provision was offered to tax by the assessee in AY 2006- 07. It was his submission that there is no prejudice to the Revenue in this regard and therefore ratio of the decisions cited on behalf of the assessee will apply to the case of the assessee also. 51. We have considered the rival submissions. Identical issue was considered by the ITAT, Bangalore Bench in the case of Syndicate Bank (supra) and it was held by this Tribunal as follows : "41. We have considered the rival submissions. From a perusal of the chart of the 8th and 9th Bipartite Settlement for the period from Nov.2002 to May 2005 and from Nov.2007 to May 2011 respectively, it is seen that right from AY 03-04 to 11-12, the Assessee has been making a claim for deduction on account of wage arrears to be paid and the revenue has allowed the claim except in AY 2009-10. In this year the provision for wage arrears made by the Assessee was at 8% of the wages prevailing while the ultimate settlement with the workers was at 12%. Thus the estimate made by the Assessee was conservative and well below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RDA amounting to ₹ 30,72,52,362 2.1 The learned CIT (A) has erred on facts and in law in confirming the disallowance made by the learned Assessing officer ["learned AO"] of interest paid to MMRDA. 2.2 The learned CIT (A) ought to have appreciated that the liability in respect of the said payments had crystallized during the year. 2.3 The learned CIT (A) ought to have appreciated that the same is revenue expenditure. 2.4 The learned CIT (A) ought to have appreciated that Section 37 of the Act allows an assessee to claim deduction of expenses other than the ones that are capital in nature, laid out or expended wholly and exclusively for the purpose of business or profession." 27. The facts with regard to this ground of appeal are as follows. The assessee was allotted leasehold rights for a period of 80 years in respect of a piece of land in Mumbai by Mumbai Metropolitan Regional Development Authority (MMRDA). The lease premium payable in respect of lease was a sum of ₹ 100.20 crores. First installment of lease premium (which is 50% of ₹ 100.20 crores) was paid by the assessee on 12.6.1995. The remaining 50% was to be paid within six months. The assessee sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee during the previous year and therefore it cannot be allowed as a deduction. In other words, the AO took the view that this was a prior period expense and cannot be allowed as a deduction in A.Y. 2005-06. The AO was also of the view that the aforesaid amounts viz., ₹ 10,95,20,067 as well as ₹ 19,77,32,295 were expenditure of capital nature and therefore cannot be allowed as deduction. The AO was of the view that interest paid on delayed payment of cost for acquiring capital asset will also partakes the character of capital expenditure. 31. The assessee relied on the decision of Hon'ble High Court of Karnataka in the case of HMT Ltd., 208 ITR 820, wherein a view was taken that premium paid for acquiring leasehold interest was akin to payment of rent in advance and should be allowed as revenue expenditure. However, the AO was of the view that premium paid in the case of assessee cannot be treated as rent paid in advance. He was also of the view that since period of leased asset was more than 80 years, assessee derives an enduring benefit by incurring the aforesaid expenditure. He accordingly disallowed the claim of assessee for deduction of the aforesaid amounts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of 18% per annum for the period 13th July, 1995 to 28th September, 1996 shall be retained by Respondent No.1 and Petitioner No.1 shall not claim any refund or appropriation of the said amount or any part thereof;" 34. It was his submission that as far as sum of ₹ 19,77,32,295 is concerned, the liability crystallizes only on the court passing the order in terms of compromise. As far as sum of ₹ 10,95,20,067 paid by assessee to MMRDA on 30.10.96 is concerned, the same represents interest @ 18% p.a. for the period from 13.7.95 to 28.9.96 on the balance installment of lease premium. It was his submission that this sum was not treated as a revenue expenditure by the assessee, but was treated as advance payment of lease premium. It was only consequent to the order of the Hon'ble Bombay High Court that the aforesaid payment was treated as interest for delayed payment of lease premium. It was his submission that the liability, as far as assessee is concerned, came to be recognised only on 24.8.2004 when the court passed the order in terms of compromise between the parties. It was his submission that till the court passed the aforesaid order, the assessee wanted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration for the asset acquired can be regarded as an expenditure incurred for the purpose of business which was carried on by the assessee. 38. The ld. counsel for the assessee pointed out that Explanation 8 will not be applicable in the present case for the reason that section 43(1) dealt with definition of the expression "cost of acquisition of assets in respect of which depreciation is to be allowed." His first submission was that the asset in question is land which is not a depreciable asset and therefore Explanation 8 to section 43(1) of the Act will not be applicable at all. Secondly, it was submitted, the Hon'ble Supreme Court in the case of Corehealth Care Ltd. 298 ITR 194 (SC) wherein the Hon'ble Supreme Court held that interest paid on borrowings for acquisition of asset which are not put to use should also be allowed as a revenue expenditure u/s. 36(1)(iii) of the Act. The law has, however, been amended by inserting a proviso to section 36(1)(iii) of the Act by the Finance Act, 2003 w.e.f. 1-4- 2004, whereby it has been provided that where interest is paid for acquisition of an asset for extension of existing business than the interest will be allowed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period from 30.7.95 to 28.9.96. It is thus clear that the liability towards interest (both the interest amounts of ₹ 19.77 crores and ₹ 10.95 crores) crystallized only pursuant to the Court's order dated 24.8.2004. Till that time, the character of the sum of ₹ 10.95 crores already paid by the assessee and the interest to be paid by the assessee of ₹ 19.77 crores remained in suspense and cannot be said to have accrued as a liability to the assessee. Till the passing of the order of the Court dated 28.4.2004, it was not clear as to whether assessee will be acquiring the leasehold rights over the property or will get back the advance paid by it to MMRDA. In that view of the matter, we are of the view that liability to pay interest crystallized only during the previous year and can be considered for allowance in A.Y. 2005-06. 40. The next question is as to whether the said expenditure can be said to be capital or revenue expenditure. As we have already seen, the character of the interest payment is clearly interest on unpaid balance consideration for acquiring leasehold rights. The question whether the said interest payment can be regarded as capital or re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of change in the method of accounting. 4.2 The learned CIT (A) failed to appreciate that the claim was in accordance with the accounting policy of the Appellant. 4.3 The learned CIT (A) failed to appreciate that the change in the accounting policy was on account of justifiable reasons and also bonafide in nature. 45. The assessee in the course of its business used to acquire loans by way of assignment from third parties. Such acquisition will be either at premium or discount. In the past, assessee had amortised the premium/discount (loss/profit) on acquiring loans under deeds of assignment over the remaining period of loan and claimed it proportionately in different assessment years. During the previous year, the assessee had changed the accounting policy and accounted for the entire loss or profit on acquiring loans in the year of acquisition. The assessee claimed deduction of ₹ 15,31,09,000 on account of loss on acquiring loans under deeds of assignment. 46. The AO was of the view that assessee cannot claim the entire expenditure in one year and should spread over the loss for the remaining period for which loans ought to be held by the assessee. 47. On app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that method by 'deferred revenue expenditure method'. The question before the Hon'ble Court was whether since in past department had accepted completed contract method; entire exercise arising out of change of method from completed contract method to deferred revenue expenditure was revenue neutral; and method adopted by assessee did not result in distortion of profits, High court was justified in holding that completed contract method of accounting adopted by assessee was valid, and that department had erred in spreading discount over remaining period of chit on proportionate basis. The Hon'ble Held in the affirmative on the above question. 50. Relying on the aforesaid principle laid down in para 20 of the judgment that the department has to bring on record a finding that method adopted by the assessee results in distortion of profits and the department cannot insist the assessee on following the old method of accounting, the ld. counsel for the assessee submitted that neither the AO nor the CIT(A) has brought out any material to show loss of revenue, consequent to change of method of accounting. 51. The ld. DR submitted that it would be appropriate to amortise the loss over th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation and appreciation on these securities has to be aggregated scripwise and only net depreciation, if any, is to be provided and allowed for in the account. 4. The CIT(A) erred in directing the AO to delete the addition of ₹ 8,82,48,583 following the decision of the ITAT in the case of Corporation Bank in the order dt 18.06.2012 in ITA No. 794 & 795/2011 while the same has not been accepted by the department and an appeal under section 260A has been filed before the Hon'ble High Court against such order and is pending." 56. Certain investments made by the Assessee in various securities including the government securities were categorised as 'Available for Sale (AFS)' and 'Held for Trading (HFT)' form and formed part of the stock-intrade of the Assessee. The depreciation claimed due to diminution in their value was ₹ 16,99,68,583/-. According to the AO, only net depreciation is allowable on the securities aggregated scrip-wise as per the RBI Guidelines and the CBDT Instruction No.17/2008 dated 26/11/2008. As per the AO, once appreciation is also considered and netting off is made, the amount allowable works out to only ₹ 8,82,48,583/-. The AO, therefore, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56 ITR 549 (iii) Southern Technologies Ltd., 310 ITR 577 (SC) 59. We have given a careful consideration to the rival submissions. Similar issue as to whether depreciation on investments held under the category "Held to Maturity" or "Available for Sale" can be allowed as deduction came up for consideration in the case of Corporation Bank in AY 10-11 in ITA No.1310/Bang/2012 and this Tribunal upheld similar order of CIT(A). The following were the relevant observations of the Tribunal: "21. We have considered the rival submissions. Similar issue as to whether depreciation on investments held under the category "Held to Maturity" can be allowed as deduction came up for consideration in the case of Syndicate Bank (supra) before the ITAT Bangalore Bench. The Tribunal on the issue held as follows: "58. We have heard the submissions of the ld. DR and the ld. counsel for the assessee. The ld. DR relied on the decision of the Hon'ble High Court of Karnataka in the case of CIT v. ING Vysya Bank Ltd. in ITA No.2886/2005 dated 06.06.2012. In the aforesaid decision, the Hon'ble High Court of Karnataka took a view that the guidelines issued by the RBI will not be relevant while computing inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is to be deduced on the basis of the accounting system regularly maintained by the assessee and that was done by the assessee in the present case." The Bangalore Bench of ITAT in Corporation Bank (supra) has also followed the above decision of the Hon'ble Supreme Court as also the ITAT, Mumbai and ITAT, Chennai. Following the above decisions, we are deciding this issue in favour of the assessee. This ground of appeal by the Revenue is dismissed. 60. Apart from the above, the ld. counsel for the assessee also submitted that the decision rendered by the Hon'ble High Court of Karnataka in the case of ING Vysya Bank (supra) is per incuriam the decision of the Hon'ble Supreme Court in the case of UCO Bank v. CIT, 240 ITR 355 (SC). He brought to our notice that the Hon'ble Supreme Court approved the practice of nationalized bank governed by Banking Regulation Act, following mercantile system of accounting both for book keeping as well for income-tax purposes. The Hon'ble Apex Court upheld the method adopted by the banks valuing stock-in-trade (investments) at cost in balance sheet in accordance with the Banking Regulation Act and valuing the same at cost or market value, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in directing the AO to delete the addition of ₹ 6,07,37,240 following the decision of the ITAT in the case of State Bank of Mysore in the order dt 17.04.2009 in ITA No.1409/Bang/03 while the same has not been accepted by the department and an appeal under section 260A has been filed before the Hon'ble High Court against such order and is pending." 62. The AO noticed that the interest due to the Assessee from its investments for the months of January, February and March on mercantile basis would be accruing only on the following 30th June. On account of this, the Assessee made a claim of ₹ 72.66 crores by way of expenditure towards broken period interest by adding back ₹ 66.59 crores for the assessment year 2005-06. As this issue pertaining to the assessment year 2004-05 was still in appeal, the AO disallowed the claim and brought to tax a sum of ₹ 6,07,37,240/-. 63. On appeal by the Assessee, the CIT(A) noticed that the Assessee makes investments in government securities as per the guidelines of RBI. The interest on these securities falls on coupon dates. The interest income from the last coupon date till 31st March is the broken period of interest in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Madras High Court in the case of CIT v. Tamil Nadu Mercantile Bank Ltd., 291 ITR 137 (Mad). The question of law before the Hon'ble Madras High Court was as follows:- "Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that interest on securities is taxable only on specified dates when it became due for payment and not on accrued basis?" The Hon'ble Madras High Court held as follows:- " In view of the deletion of section 18 of the Income-tax Act, 1961, with effect from 1st April, 1989, the third proviso to section 145(1) was inserted with effect from April 1, 1989, which is a saving clause. Although the amendment was with effect from April 1, 1989, it clearly provides that any income by way of interest on securities shall be chargeable to tax as the income of the previous year in which such interest is due to the assessee only where no method of accounting is regularly employed by the assessee. In other words, if the assessee is maintaining cash system of accounting, the aforesaid proviso would not apply. The legislative intent is that when the assessee is maintaining the cash system of accounting, income by way of interest on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
