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| The Tax Publishers2019 TaxPub(DT) 7522 (Del-Trib) INCOME TAX ACT, 1961
Section 143(3)
Where income accrued to assessee- broker only when payment was released by builder(purchaser), considering that revenue was accepting mercantile system adopted by assessee for earlier years, then following rule of consistency, revenue could not take converse view.
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Assessment - Additions to income - Addition made by AO on account of difference between receipt shown on return and appearing on TDS certificates -
AO made addition for difference in total receipt of assessee as per TDS certificate and return of income filed. Assessee contended that he was consistently following mercantile method of accounting and addition was unwarranted. Held: Assessee, being a broker, got commission for sale of property of different builders as per agreement from which income accrued and was ascertained at time of release of payment to assessee by builder. So commission accrued and was released subject to condition of payment of installment by purchaser. In other words, income accrued to assessee only when payment was released by builder. When assessee was consistently following mercantile system of accounting, which was accepted by revenue, then converse view could not be taken by revenue, as revenue is required to follow rule of consistency.
REFERRED : Radhasoami Satsang v. CIT (1992) 1 SCC 659 (SC) : 1992 TaxPub(DT) 0858 (SC)
FAVOUR : Against the assessee
A.Y. :
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