Dismissing the appeal of the revenue the Court held that though the assessee following the mercantile system of accounting Bill raised by assessee for premature termination of contract however the contracting company not accepting Bill. Income did not accrue. As regards another bill of which a small part is received after four years, claim as bad debt is to be accepted. (AY. 2002 03)
CIT v. Bechtel International Inc. (2019) 414 ITR 558 / ( 2020) 113 taxmmann.com 514 / 192 DTR 422(Bom.)(HC)
S. 5 : Scope of total income-Accrual-Real income theory-Bad debt -Mercantile system of accounting-Bill raised for premature termination of contract-Contracting company not accepting Bill- Income did not accrue–Another bill of which a small part is received after four years–Claim as bad debt is to be accepted. [S. 36(1)(vii)]