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Section 145 method of accounting for PGBP is:
ACash or mercantile regularly employed
BOnly mercantile (per relevant Section)
COnly cash
DAO's choice
Answer & Solution
Correct answer: A. Cash or mercantile regularly employed
1. Section 145(1): PGBP income computed under either cash or mercantile system regularly employed.
2. Section 145(2): CBDT can notify Income Computation and Disclosure Standards (ICDS).
3. Section 145(3): AO can reject books if not correct/complete/method irregular.
_Source: ICAI BoS CA Final Paper 7, Ch 3 "Profits and Gains of Business or Profession"_
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