Law:

Section:

[2007] 291 ITR 137 (MAD.) HIGH COURT OF MADRAS Commissioner of Income-tax v. Tamilnadu Mercantile Bank Ltd. P.D. DINAKARAN AND MRS. CHITRA VENKATARAMAN, JJ. TC (A) NOS. 15 AND 24 OF 2003 JANUARY 23, 2007 Section 145 of the Income-tax Act, 1961 - Method of accounting - Others â–  In view of second proviso to section 145(1), even after deletion of section 18 interest on securities was taxable only on specified dates when it became due for payment and not on accrued basis [Assessment years 1989-90 and 1990-91] The assessee, while filing return of income for the assessment years 1989-90 and 1990-91, claimed exclusion of the sums representing the accrued interest for the period till 31-3-1989 and till 31-3-1990 for the respective assessment years, in respect of the securities held by it on the ground that it did not become due in the respective previous years and that even after the omission of section 18, the interest on securities should be charged only when it became due for payment as it did not accrue on day to day basis. The Assessing Officer, however, disallowed the claim of the assessee, holding that after the omission of section 18 of the Act i.e. after 8-7-1988, interest was to be assessed under the head 'Business' or 'Other sources', as the case may be, and, therefore, the interest which accrued up to the end of the accounting year became taxable as the income of the previous year. Held that in the instant case, there was no change in the method of accounting by the assessee. The Assessing Officer accepted the method of accounting followed by the assessee during the earlier assessment years but, without any change in circumstances, changed the method of assessment during the financial years in question, which was unsustainable. Even though section 18 was deleted, the assessee was taxable for interest on securities only on specified dates when it became due for payment, in view of third proviso to section 145(1) which was in force during the relevant assessment years, as well as in the light of the well settled principles laid down in various decisions. Thus, the assessee's claim was to be upheld. JUDGMENT P.D. Dinakaran, J.-These tax case appeals are…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492