- (1.) HEARD learned counsel for the parties. The Assessing officer vide assessment order dated 21.12.2009 held that, Section 145 of the Income Tax Act provides that either cash or mercantile system of accounting has to be followed and therefore, there is no scope of realising income in cash and expenses in mercantile system. The Assessing officer then held that, since provisions are not allowable and the assessee has claimed separately by a provision for bad and doubtful debts as per Section 36(i) of the Income Tax Act, 1961 an amount of Rs. 2,59,02,596/ - is added to the total income of the assessee.
(2.) HOWEVER , the C.I.T. (A) as well as the I.T.A.T. observed that the accounts is maintained as per the guidelines issued by the R.B.I. and Section 45(ii) of the R.B.I. Act starts with non obstante clause which overrides other laws. The C.I.T. (A) as; well as the Tribunal followed the decision of Delhi High Court in case of C.I.T. Vs. Vasisth Chay Vyapar Ltd. and Ors. : 330 ITR 440 (Del) (2011) and held that the issue is covered by the decision of Delhi High Court. Learned counsel for the appellant could not distinguish the ratio of the decision of Delhi High Court.
(3.) IN view of the said decision, the C.I.T.(A) and the I.T.A.T. accepted the method of accounting of the assessee and which was in accordance with the Instruction No. 9949 of the Reserve Bank of India and therefore, addition was deleted. In view of the above reasons, we are of the considered opinion that on this point, no question of law is involved.;