Section 145 in The Income Tax Act, 1961
145. [ Method of accounting. [ Substituted by Act 22 of 1995, Section 31, for Section ... completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) or accounting standards as notified under
carried in 'Profit and Loss Account' - Credited
to separate account - 'Interest suspense account' - Accrual
of income - Whether arises - Interest amount - Whether ... same to 'Interest Suspense
Account' instead of to "Interest Account' or 'Profit and
Loss Account' is a well recognised
profit and loss account on the same lines as the
World trading and profit and loss account. The profit and
loss account maintained in India ... ascertained
on the basis of the assessee's method, or where no method of
accounting has been regularly employed, the income must be
computed
year of account-Necessity-Assessee's method of
accountancy-Powers in Income-tax Officer in computing
profits- Indian Income ... account-
ing regularly employed by the assessee. If, therefore,
there is a system of accounting regularly employed and by
appropriate adjustments from the accounts maintained
assessing
officer the other method would have been more preferable. The
method of accounting cannot be substituted by the assessing
officer merely because ... accounting period cannot be ascertained without
taking into account the stock in trade at the end of the
accounting period. While considering the method
make change in its regular method and employ a different method of accounting even in respect of different parts of its business or different classes ... been accounted for in the accounts. The management has decided to account for the same on the cash basis."
8. The Tribunal held that
kept her accounts according to what is known as the "mercantile accountancy system" or the "book profits system of accountancy ... books to the accounts of the debtors, credited it to the interest account and then transferred it to her own personal account. The Income
assessee has employed a regular method of accounting, his accounts are correct and complete, and the method employed is such that the income ... employed a regular method of accounting, the accounts are correct and complete, and the method employed is such that the income can be deduced therefrom
ascertained on the basis of the assessee's method, or where no method of accounting has been regularly employed, the income must be computed ... cases the method of accounting must be followed, unless in any case where the accounts are correct, but the method is such that
Department submitted that the mode or method of valuing the closing stock was a method of accounting within the meaning of Section 13 . Section ... that time has been his regular method, and start a new regular method and not merely a new method for a casual period.
In that
