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2011 (5) TMI 538 - DELHI HIGH COURTUndisclosed income from interest - addition was made on the ground that in mercantile system of accounting, which was followed by the assessee and relevant for income tax purpose, interest on such loans/ICDs should also be treated as accrued income - Held that:- The interest had not even been recorded by the assessed in its books of accounts - The assessed had also issued a notice to the parties under Section 138 of the Negotiable Instruments Act for dishonour of cheques issued by all (except one of the debtors) followed by initiation of appropriate proceedings. The debts were written off as bad debts and were also allowed by the Assessing Officer in subsequent years - These facts lead to the inescapable conclusion that realization of even the principal amount was in jeopardy and, therefore, there cannot be said to be any real accrual of income by way of interest - See CIT v. Birla Gwalior (P) Ltd [1973 (4) TMI 2 - SUPREME Court] - Decided in favour of assessee.
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