DIPAK KUMAR SEN, J.

( 1 ) THIS reference arises out of the income-tax assessment of Messrs. Rajasthan Investment Co. Private Ltd. , the assessee, for the assessment years 1968-69, 1969-70, 1970-71 and 1971-72, the relevant previous years ending on the 30th April of 1967, 1968, 1969 and 1970, respectively.

( 2 ) THE facts found and/or admitted in these proceedings are shortly as follows: the assessee is an investment company and its source of income is interest received from loans and advances. Its period of account ends on the 30th April each year.

( 3 ) THE assessee used to maintain its accounts on the mercantile basis. By a resolution of the board of directors of the assessee passed on the 17th March, 1966, it was resolved that with effect from the then current accounting year, i. e. , the 1st May, 1966, the assessee would change its method of accounting from mercantile basis to cash basis and this new method should thereafter be regularly followed from year to year.

( 4 ) AS a result of this change from the 1st May, 1967, onwards the assessee brought into its account whatever interest it actually received and not what was receivable.

( 5 ) DURING the assessment years involv

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