2014 (6) TMI 78

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..... th Visnagar Nagrik Sahakari Bank Ltd. was doubtful - When the recovery of the principal amount itself was doubtful, then, the question of recovery of interest was almost impossible – thus, the assessee was justified in not accounting the interest income on accrual basis in the income for the year – Relying upon CIT vs. Ferozepur Finance Pvt. Ltd. [1980 (5) TMI 29 - PUNJAB AND HARYANA High Court] - .....

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..... r Bank. The A.O observed that Assessee had FDR of Rs. 1,90,38,100/- in Visnagar Bank. But no interest income from these FDR had been offered by the Assessee. The ld. A.O gave reasonable opportunity of being heard on this issue. After considering the Assessee s replied it was held that the appellant had not furnished any documentary evidence to substantiate its claim that the bank had gone into liq .....

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..... possible. In such a situation, the appellant was justified in not accounting the interest income on accrual basis in the income for the year. Reliance in this regard is palced on the decision of the Hon ble Punjab and Haryana High Court in the case of CIT vs. Ferozepur Finance Pvt. Ltd. reported in (1980) 124 ITR 619 (Pun.) wherein the Punjab High Court upheld the above proposition SLP filed .....

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