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| The Tax Publishers2020 TaxPub(DT) 1736 (Del-Trib) INCOME TAX ACT, 1961
Section 145
Cash system of acountig being the method regularly and consistently followed by assessee consistently for the concerend assessment year as well as subsequent year could not be rejected as by cash system of accounting profits could be correctly and fairly deduced and AO could not point out any irregularity in cash system so followed.
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Accounting method - Mercantile v. cash system - AO rejected cash system without pointing out specific defects -
AO rejected cash method of accounting followed by assessee holding that accounts had to be in the nature of 'venture account' and correct profitability could be arrived at by following accrual method only. Held: Cash system of acountig was the method regularly and consistently followed by assessee consistently for the concerend assessment year as well as subsequently year. The same could not be rejected as by cash system of accounting profits could be correctly and fairly deduced and AO could not point out any irregularity in cash system so followed.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 37(1)
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