2014 (7) TMI 139

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..... Tribunal was considering a case of the assessee for the assessment year 2003-04. The assessee was in appeal against the order passed on 4th March, 2009 by the Commissioner of Income Tax (Appeals) Mumbai. The Tribunal by the impugned order dated 22nd July, 2011 allowed the assessee's appeal partly. The Tribunal has misdirected itself in law. Mr. Pinto submits that the interest which was accrued ought to have been disclosed when the assessee was following mercantile system of accounting. The Income Tax Act postulates that whatever interest is accruing ought to be treated as income and in the event, the same is not realized, there is a provision pertaining to writing off bad debts and a deduction, thus, can be claimed in relation to the in .....

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..... January, 2009 dismissing the Department's Special Leave Petition against the judgment dated 21st June, 2007 of the Calcutta High Court in Income Tax Appeal No.391 of 2007, wherein similar view has been taken. Learned counsel also relied on the judgments cited before the Tribunal namely that of the Delhi High Court in the case of Commissioner of Income Tax V/s. Vasisth Chay Vyapar Ltd. reported in (2011) 330 ITR 440 and in the case of Director of Income Tax V/s. Brahamputra Capital Financial Services Ltd. reported in (2011)335 ITR 182. 6] The later decision in the case of Director of Income Tax V/s. Brahamputra Capital Financial Services Ltd., though not brought to the notice of the Tribunal, according to the learned counsel, deals wit .....

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..... ircumstances, that this income in question was not and cannot be assessed on accrual basis. 9] We do not find that the Tribunal has either misdirected itself in law or its order can be termed as perverse warranting interference in our appellate jurisdiction. We find that the view taken by the Tribunal accords with the Reserve Bank of India guidelines and which are not in any way in conflict with the Income Tax Act, 1961, the Hon'ble Supreme Court has held in the case of UCO Bank that the interest income would have been brought to the Profit and Loss Account provided it was actually realized, that in case of Nationalized Bank it treated something which is doubtful, and therefore, kept it in a suspense account, was held to be a permissib .....

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