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TMI Blog1994 (4) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... o 1979-80 and of Rs. 2,06,250 for the assessment year 1980-81 was not includible in the net wealth of the assessee for these years ? " The brief facts of the case are that the assessee advanced loans to certain parties such as Princess Trivikrama Kumari and Golden Sun Cinema Theatre, etc. The interest income against these loans was not shown in the net wealth declared by the assessee for the assessment years 1977-78 to 1980-81. The Wealth-tax Officer while completing the assessments included in the net wealth interest of Rs. 41,750 for each of the assessment years 1977-78 and 1978-79 and of Rs. 2,06,250 for the assessment year 1980-81, on accrued basis. It was found that a sum of Rs. 1,75,000 was given as loan to Golden Sun Cinema Theatre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee for the purpose of computing net wealth. We have considered the matter. Section 145 of the Income-tax Act, 1961, deals with the method of accounting and as per its sub-section (1) the income from other sources has to be computed in accordance with the method of accounting regularly employed by the assessee. This section makes it clear that for the income from " other sources " the method of accounting has to be taken into consideration. It is not in dispute that the system of accounting maintained by the assessee is the cash system and not the mercantile system and, therefore, it has to be examined whether the Wealth-tax Officer could not have added accrued interest when the system of accounting of the assessee which was regularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he only thing to be seen is whether the interest which has accrued and not received could be considered to be a movable asset or not ? This matter was considered by the apex court in the case of CWT v. Vysyaraju Badreenarayana Moorthy Raju [1985] 152 ITR 454, it was held that the system of accounting, mercantile, cash or hybrid, is of no relevance for the purpose of determining the assets of the assessee. All the assets of the assessee, barring those expressly exempted by the statute, are to be taken into account. It was further observed that it is apparent that what accrues as a right also falls to be included within the assets of an assessee under the Act. That being so, the conclusion is inescapable that even though the accounts of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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