K. JAYASIMHA BABU, J. - (1.)THE AO took the view that the method of accounting adopted by the assessee did not reflect his true income. THErefore, he added further sums to what had been reported by the assessee as his income. THE assessment year is 1982-83.
(2.)THE assessee received moneys from Hasan brothers, with which he had entered into an agreement, in terms of which the firm was to hire out the assessee's service to others, receiving the entire consideration for such service and pay 3/4th of the gross receipt to him upto 31st March, 1979 and thereafter 1/2 of gross receipts or Rs. 50, 000 per annum, whichever was higher. THE assessee as also the firm had been following a method of accounting under which amounts received for films either in instalments or as advance at different points of. time, were accounted for, fully in the year the picture was released. That method was accepted by the AO for the earlier years and has been followed for the assessment of the firm as also the assessee in subsequent years as well. It was only during this assessment year the AO held that that method of accounting did not reveal the true income for the year.
All the payments made by the firm to the assessee had been accounted for, in the years in which the pictures were released and the full income from the movie received by the assessee through the firm to the extent of the receipt in his hands had been taxed, the balance having been taxed in the hands of the firm. The Tribunal and the CIT disagreeing with the AO concluded that there was no loss, that the income was properly deducible from the method of accounting that had been employed by the assessee and, therefore, there was no warrant for the AO to have adopted a different basis for the purpose of determining the income of the assessee.

Having perused the order of the Tribunal we are satisfied that the Tribunal has properly considered the matter and we have not been shown anything to hold that the conclusions reached by the Tribunal that there was nothing in the method of accounting adopted which resulted in the income properly chargeable to tax, not being made so, is incorrect.

We, therefore, answer the question referred to us :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the expression 'entire consideration' occurring in cl. 3 of the agreement meant only the consideration relating to completed pictures and excluding the part payments received in respect of ongoing pictures" 2. Without prejudice to the answer to the above question, whether the Tribunal was right in further holding that the term 'gross receipts' occurring in the same clause did not mean the gross realisation of the firm during the year but only the realisation attributable to the completed pictures ignoring the part receipts for ongoing pictures" 3. Whether the Tribunal was right in law in holding that it could not be said that on the basis of the method of accounting followed by the assessee the income of the assessee could not be properly deduced and a different basis had to be evolved by the ITO"" against the Revenue and in favour of the assessee.