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2012 (12) TMI 1021 - ITAT BANGALOREWhether the interst accured on NPA should be recognized as assessee’s income on accrual or on receipt basis - Held that:- If a particular income is due but is not possible to recover the same, then it cannot be said to have been accrued and the said amount cannot be brought to tax - the definition of NPA shows an asset becomes non performing when it ceases to yield income - when it is not yielding any revenue, the question of showing that revenue and paying tax would not arise - as per policy guidelines issued by the National Housing Bank, the income from NPA should be recognized only when it is actually received - the contention of the revenue that in respect of NPA even though it does not yield any income as the assessee has adopted a mercantile system of accounting, he has to pay tax on the revenue which has accrued notionally is without any basis - Decided in favor of assessee
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