Suhas Chandra Sen, J. - (1.) The question referred in this case is as follows: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the interest on loan to M/s. Central Cotton Mills Ltd., was liable to be included in the assessment on the due basis and not on the basis of realisation and was, therefore, right in sustaining the addition of Rs. 55,000, being interest on the said loan calculated on the due basis."
(2.) The facts relevant to this case and as found by the Tribunal are as follows : The assessee claimed before the ITO that a sum of Rs. 55,000 was not taken into account by it as it considered realisation of the loan doubtful. The ITO rejected the assessee's claim on the ground that the assessee was maintaining the accounts on mercantile basis and that the interest could not escape assessment on the only ground that the debt was doubtful. Therefore, following his decision for earlier years, the ITO included Rs. 55,000 in the total income of the assessee.
(3.) In appeal, following the decision of his predecessor as well as of the Tribunal in the assessee's own case, the AAC upheld the action of the ITO.;