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TMI Blog2014 (7) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court] - once there is no dispute that the interest considered as accrued was a non-performing asset as per Reserve Bank of India guidelines, then, the income from this interest did not accrue to the assessee – the income was not and cannot be assessed on accrual basis - once the view taken by the Tribunal was possible the income has not been realized by the assessee, the addition was rightly deleted – Decided against Revenue. - Income Tax Appeal No. 221 of 2012 - - - Dated:- 11-6-2014 - S. C. Dharmadhikari And B. P. Colabawalla,JJ. For the Appellant : Mr. Arvind Pinto For the Respondent : Mr. Nitesh Joshi i/b. Atul K. Jasani ORDER P. C. 1] Heard Mr. Pinto, learned advocate appearing on behalf of the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, submits that the appeal raises a substantial question of law, and therefore, deserves to be admitted on the questions formulated at para4 page 5 of the paper book. 4] On the other hand, the learned counsel appearing on behalf of the assessee submits that the view taken by the Tribunal is in accord with the settled principle. Even if, the interest income is shown on accruing basis, yet, after it is not realized, the banking institutions or nonbanking functional institutions following mercantile system of accounting are permitted to treat the same income as doubtful. They are permitted to keep the same in suspense account and it is not necessary that it has to be brought to the Profit and Loss Account of the assessee. The Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nil after setting off of brought forward losses of earlier years to the extent of ₹ 2,77,35,058/under the head interest income. 8] The assessee had credited only an amount of ₹ 38,57,933/as interest on loans. The Assessing Officer was of the view that the interest accrued on the entire loans should have been shown as income. The details as to how the interest income on accrual basis should have been disclosed are, therefore, referred to by the Tribunal. The Tribunal held that the said income was not realized. It held that the assessee follows the mercantile system of accounting. The Tribunal held that the loan advanced by the assessee which was in NBFC had become nonperforming asset. That is how following judgments rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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