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TMI Blog2015 (3) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995-96 and 1996-97, Tax Case (Appeals) Nos.1534 and 1535 of 2008 have been filed before this Court and the same were allowed by this Court on an interpretation of sub-section (1) of Section 145 of the Income Tax Act. For the subsequent assessment years, viz., 1999-2000 to 2002-03, 2003-2004 and 2004-05, a batch of tax case appeals have been filed before this Court in T.C.(A)Nos.237 of 2010 batch and this Court following the decision of this Court in the case of Commissioner of Income Tax V. Ashok Leyland Finance Ltd. reported in (2012) 82 CCH 287, allowed the appeals answering the following substantial questions of law in favour of the assessee: "1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute. The whole case revolves around the hire purchase agreement entered into between the appellant and the purchasers in respect of purchase of vehicle on hire purchase basis and to make payment in equated monthly instalments (EMI method). While computing income for the purpose of computation of tax, the appellant/assessee followed Equated Monthly Instalment method, whereas, the assessee maintained the books of accounts on Sum of Digits Method. While completing the assessment, the Assessing Officer was of the view that it was not permissible for the assessee to compute its income using one method in its day to day accounts and to use another method for computing income chargeable to tax. In so holding, the Assessing Officer disallowed the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Special Bench and not by the Divisional Bench in the case of Ashok Leyland Finance Ltd., dated 28th February 2006. Respectfully following the order of Special Bench, we hold that ld CIT(A) was justified in confirming the stand taken by the Assessing Officer.'' 7. Aggrieved by the said order of the Tribunal, the assessee is before this Court. 8. Learned counsel appearing for the assessee submitted that issue involved in this case is covered by a decision of this Court in the case of Commissioner of Income Tax v. Ashok Leyland Finance Ltd., (2012) 210 Taxman 95 (Mad), wherein, in an identical facts of the case, the issue was answered in favour of the assessee. He also pointed out that in respect of the very same assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that the assessee is justified in following the Equated Monthly Instalment method to account the finance charges for the income tax purposes only? 2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the assessee is justified in following Sum Of Digits Method to account the finance charges to arrive at balance sheet and profit and loss statements only?" 12. In that case also, hire purchase agreement was entered into in respect of purchase of vehicles on hire purchase basis. While returning the income, the assessee followed Equated Monthly Instalment method as against the Sum of Digits method for the purpose of arriving at the balance sheet and profit and loss statement. The assessee laid e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action was not a loan transaction, but only a hire purchase agreement. 9. It is an admitted fact that the Revenue did not challenge this finding of fact before this Court for the purpose of considering as to which method should be taken in a correct method for the purpose of arriving at the real income of the assessee. 13. In the present case also, we find that factually there is no dispute that the entire transaction is hire purchase transaction and not a loan transaction and the same methodology is adopted. In the case of Commissioner of Income Tax v. Ashok Leyland Finance Ltd., (2012) 210 Taxman 95 (Mad), on fact, finding has been arrived at paragraph No.17 which may be relevant for the purpose of deciding this case, which reads as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion that the Assessing Officer had committed a serious error in ignoring the EMI method, to adopt SOD method. 19. We are in agreement with the reasoning of the Tribunal in this regard that when once the Revenue had accepted the character of the transaction as hire purchase transaction, the income that flows from the transaction has to necessarily follow the treatment that is given under the hire purchase agreement. Secondly, when the Revenue had not disputed the fact that on all the earlier years, the Revenue had treated the income as per the hire purchase agreement on EMI basis, there are no materials available as on record to show that following such method had really resulted in suppression of income, in other words, there was no tru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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