AJIT K. SENGUPTA, J. ( 1 ) AT the instance of the Commissioner of income-tax, the following question of law has been referred to this court under Section 256 (1) of the Income-tax Act, 1961 ("the Act"), for the assessment year 1969-70 :"whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the proceedings under Section 147 (b) Of the Income-tax Act, 1961, were not according to law. " ( 2 ) THE facts are that the assessee, James Finlay and Co. Ltd. , is a company incorporated in the United Kingdom and it carries on business in India having branches in Calcutta and Bombay. The Calcutta office acts as agent for various tea and steamer companies incorporated outside India as also for other overseas principals. The Bombay office acts as agent for Lloyds' insurance companies and steamer companies. Both the offices deal in sundries, electrical and other goods. The Bombay branch has in the course of its business advanced in 1963 a sum of Rs. 7. 50 lakhs to Speciality Papers Ltd. for whom it was appointed as selling agents. The interest due on this advance was credited to the profit and loss account of the Bombay branch till December 31, 1967. The debtor-company had not paid any interest or repaid to the principals except anything Rs. 56,000. From January 1, 1968, the debtor-company did not credit the interest to the profit and loss account but was showing it in the suspense account and this position continued till the assessment year 1970-71. On December 1, 1969, Speciality Papers Ltd. addressed a letter to the assessee for the settlement of the outstanding loan of Rs. 11. 65 lakhs on payment of Rs. 10 lakhs in one instalment and the assessee agreed to forgo all interest accrued up to December 81, 1969. On December 15, 1969, the assessee wrote to Speciality Papers Ltd. that in waiving outstanding interest, commission, etc. , sufficient concession had been made and they were not agreeable to any further writing off of the amount of loan On February 3, 1971, Speciality Papers Ltd. offered some instalment plans for repayment of the principal amount of Rs. 11. 65 lakhs but urged that the interest and commission which accrued in favour of the assessee-company should be waived. The assessee-company was not satisfied at the instalments remaining unpaid. 11. 65 lakhs but urged that the interest and commission which accrued in favour of the assessee-company should be waived. The assessee-company was not satisfied at the instalments remaining unpaid. In August, 1971, the debtor-company was taken over by the Jatia Group and the new management was requested by the assessee-company to pay interest on the loan up to December 31, 1967, because the interest accrued up to that stage had already suffered tax in the assessee's hands ; and, on December 31, 1971, the entries in the suspense account relating to interest were reversed. In the proceedings for reassessment to tax for the assessment year 1969-70, the Income-tax Officer included Rs. 57,234 stating as follows : "interest credited in the interest suspense account charged on the loan advanced to Speciality Papers Ltd. . . . Rs. 57,234. " ( 3 ) WHEN the assesses went up in appeal before the Appellate Assistant Commissioner, it was contended before him on behalf of the assessee that it had furnished all particulars and that no new information came to the knowledge of the Income-tax Officer after the original assessment was completed. Thus, it was urged that the Income-tax Officer had no jurisdiction to reopen the assessment. The Appellate Assistant Commissioner rejected the contention of the assessee, holding as follows :"i have looked into the facts, It is seen that the assessment has been reopened under Section 147 (b ). Though the appellant's argument is that they had furnished all particulars and the reopening is without jurisdiction, it is not correct. The jurisdiction is validly assumed. I have no reason to interfere. " ( 4 ) SO far as the inclusion of the sum of Rs. 57,234 representing the credit in the suspense account was concerned, the Appellate Assistant Commissioner held that the point had been clinched by the decision of the Tribunal. ( 5 ) BEFORE the Tribunal, the assessee challenged the order of the Income-tax Officer both on legal points as well as on facts. It was argued that the reopening of assessment in terms of Section 147 (b) of the Act was unjustified. ( 5 ) BEFORE the Tribunal, the assessee challenged the order of the Income-tax Officer both on legal points as well as on facts. It was argued that the reopening of assessment in terms of Section 147 (b) of the Act was unjustified. It was also urged that the assessee had maintained the accounts on mercantile basis and that the income had accrued from 1957 and that it did not receive the principal and interest from Speciality Papers Ltd. Having regard to the bad time faced by that company and realising that the amount was doubtful of recovery, the assessee on bona fide grounds had to change the system of accounting, so far as accrual or receipt of interest from Speciality Papers Ltd. was concerned. The Tribunal observed that the question is linked to the merits of the assessment and after considering several decisions, the Tribunal held that there is no evidence in this case that the amount of interest actually accrued to the assessee. The Tribunal observed :"the position of law about the accrual of income being of highly technical and ticklish nature, we cannot hold and suggest that the earlier Income-tax Officer did not consciously apply his mind while putting his mark in the account. " ( 6 ) ACCORDING to the Tribunal, if such a view is held, it would follow as a consequence that the proceedings under Section 147 (b) are not according to law. Hence, the Tribunal cancelled the impugned order under Section 147 (b) of the Act. The Tribunal proceeded on the basis that interest income was not true income and accordingly it did not accrue to the assessee. It appears that for the assessment year 1970-71, in the case of the assessee, a question was referred to this court whether the Tribunal was right in holding that the interest due from Speciality Papers Ltd. was includible in the assessment year 1970-71 as the previous year ended on December 31, 1969. There, this court held that the alteration in book-keeping and transfer of amounts to the suspense account could not be termed as a change in the method of accounting. Though there was difficulty in realising the interest in the year of account, there was no material to show that there was any agreement with the debtors to waive the interest or to keep it in a suspense account. Though there was difficulty in realising the interest in the year of account, there was no material to show that there was any agreement with the debtors to waive the interest or to keep it in a suspense account. Hence, the claim for interest had not been given up. The amounts of Rs. 8,264 and Rs. 55,920 were includible in the total income of the assessee for the assessment year 1970-71 (See fames Finlay and Co. v. CIT ). ( 7 ) THE assessment was reopened under Section 147 (b ). The assessee credited the interest in the suspense account and there was doubt whether this was taxable or not. It has been found subsequently that this interest should have been included in the assessment. The Appellate Assistant Commissioner also upheld the initiation but the Tribunal linked up the matter with its merits. In other words, the Tribunal held indirectly that this is not real income and, therefore, it could not have been included in the assessment. We are, however, unable to subscribe to the view of the Tribunal on the facts of this case. The reopening of the assessment has not been made on a mere change of opinion. The Income-tax Officer obtained the necessary information about the portion of the interest in the proceeding for the assessment year 1970-71. It is only in the assessment year 1970-71 that the assessee stated that it decided to adopt the cash basis for the interest payable by Speciality Papers Ltd. and that is why it was kept in the suspense account. This fact was not stated in the original assessment. As a matter of fact, in the subsequent year, i. e. , 1970-71, this court, as indicated earlier, said that the interest was includible in the assessment, being the real income of the assessee. On the facts, it could not be said that there was no chance of realisation of interest. If it could not have been written off in the subsequent year, it follows that in the earlier year also interest ought to have been included as the income of the assessee. We are of the view that the Income-tax Officer was justified in reopening the assessment under Section 147 (b ). ( 8 ) FOR the reasons aforesaid, we answer this question in the negative and in favour of the Revenue. There will be no order as to costs.