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TAXAP/672/1999 2/ 2 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No.672 of 1999
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ASSTT.
COMMISSIONER OF INCOME TAX - Appellant
Versus
KARNAVATI
INVESTMENT PVT LTD - Opponent
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Appearance
:
MR MANISH R
BHATT for Appellant.
MR RK PATEL for
Opponent.
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CORAM
:
HONOURABLE
MR. JUSTICE K. A. PUJ
and
HONOURABLE
MR. JUSTICE BANKIM N. MEHTA
Date:
28/07/2008
ORAL
ORDER
(Per
: HONOURABLE MR. JUSTICE K. A. PUJ)
The
Revenue has filed this Tax Appeal under Section 260A of the
Income-Tax Act, 1961 for the assessment year 1990-91. The appeal was
admitted on 06.09.2000 in terms of the following substantial question
of law:
?SWhether, in the peculiar
facts and circumstances of the case, the Appellate Tribunal was right
in law and on facts in holding that the change in the method of
accounting made by the present assessee, a subsidiary of the holding
company with whom deposits were placed, from mercantile to cash basis
was bona fide and deletion of the addition made on account of
interest chargeable was justified in law?
2. A similar question was raised
by the Revenue in Tax Appeal No.585 of 1999. The said appeal along
with the entire group which, inter alia, includes the present
Tax appeal was heard by this Court and the appeal filed by the
Revenue was dismissed. The question formulated by this Court was
answered in favour of the assessee and against the Revenue. The Court
took the view that the Tribunal was right in holding that the change
in the method of accounting made by the assessee from mercantile to
cash basis was bona fide and deletion of the addition made on
account of interest chargeable was justified in law.
3. For the reasons stated therein,
we decide this question in favour of the assessee and against the
Revenue. The Appeal filed by the Revenue, therefore, stands dismissed
without any order as to costs.
[K.
A. Puj, J.]
[Bankim
N. Mehta, J.]
Rajendra
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