9911796707
TMI Blog2016 (5) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... mount and therefore, in view of our findings hereinabove, and facts of the present case, interest which has been shown as interest accrued but not due, being hypothetical income, cannot be made a subject of levy of tax. It is settled issue that income accrues only when the right to receive is acquired and the right can be said to have been acquired when an enforceable debt is created in favour of the assessee. Therefore, the income which has not been received and not acknowledged or which has not been acknowledged as payable to the assessee, cannot be taxed. In the circumstances and facts of the case, the Ld. CIT(A) is not justified in confirming the action of the Assessing Officer in taxing the income. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal. 5. The Commissioner of Income Tax(Appeals) has wrongly assumed in para 8 of the order that this Hon'ble Tribunal has not gone into the merits of the case for Assessment Years 1999-2000 to 2001-02 without considering the specific finding in para 5 of the Tribunal order based on the order in the case of Hindustan Newsprint Ltd. and also without considering the specific findings in para 7 and the judgments relied on by holding that what can the assessee is only a real income and not hypothetical income. 6. The Commissioner of Income Tax(Appeals) ought to have found that by virtue of section 194A of the Act the person responsible for paying any income by way of interest shall at the time of credit of such income to the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this case is addition of interest income amounting to ₹ 3,23,91,555/- which was not offered to tax. The assessee is following the mercantile system of accounting is not in dispute. It was argued that u/s. 194A of the Act, a person responsible for paying any income by way of interest shall at the time of credit of such income to the account of the payee or at the time of payment thereof whichever is earlier has to deduct income thereon. Since the bank has neither credited the interest nor paid the interest, no tax at source was deducted in respect of the entry passed by the assessee in the balance sheet as interest accrued but not due. There is no change in the method of accounting which is mercantile system of accounting as is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
