Judgment :- N. V. BALASUBRAMANIAN, J. This is the tax case reference at the instance of the assessee and the following question of law has been referred to us by the Tribunal for the asst. yr. 1978-79: "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the accrued interest on hire-purchase of machinery on loans and penal interest are liable to be included in the total income, notwithstanding the fact that the due dates of payment fell after 31st of March of the relevant previous year (R.A. No. 1513) ?" The point that arises in the question of law referred to us is whether the accrued interest on hire-purchase of machinery as well as the penal interest are liable to be included in the total income of the assessee for the asst. yr. 1978-79. A similar question of law came for consideration in the assessee's own case in T.C. No. 1102 of 1983 and this Court in its judgment dt. 17th February, 1998 [reported as Tamil Nadu Small Industries Development Corpn. Ltd. vs. CIT 2000 (160) CTR(Mad) 328] has held that the accrued interest on hire-purchase of machinery loan as well as the penal interest are liable to the included in the total income of the assessee on the basis that both the amounts became due during the previous year relevant for the assessment year. Mr. P. B. Sampathkumar learned counsel for the assessee submitted that he has raised the plea before the Tribunal on an appeal for some other assessment year that the assessee was maintaining cash system of accounting and the Tribunal also accepted the case of the assessee for that year and, therefore, the amounts are not liable to be included in the assessment. However, it seems that the Tribunal in the instant case has rejected such a plea and held that the assessee was following the mercantile system of accounting and since it was found that the assessee was following the mercantile system during the assessment year in question, the accrued interest due and the penal interest are liable to be included in the total income of the assessee for the asst. yr. 1978-79Learned counsel appearing for the assessee also submitted that the matter should be remitted to the Tribunal. yr. 1978-79Learned counsel appearing for the assessee also submitted that the matter should be remitted to the Tribunal. We are unable to accept the contention of the learned counsel for the assessee in view of the clear finding of the Tribunal in the instant case that the assessee was following the mercantile accounting and hence we are of the opinion that the earlier order made in TC No. 1102 of 1983, dt. 17th February, 1998 (supra) would apply to the facts of this case. Hence, we answer the question of law referred to us in the affirmative and against the assessee. However, there will be no order as to costs.