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2013 (11) TMI 904 - ITAT PUNEInterest on sticky advances – accrual of income - provision of interest on doubtful debts - Held that:- As per Circular dated October 6, 1952 issued by CBDT, where interest accruing on doubtful debts is credited to a suspense account, it need not be included in assessee's taxable income, provided the Income tax Officer is satisfied that recovery is practically improbable– Following UCO Bank vs. CIT [1999 (5) TMI 3 - SUPREME Court] - A beneficial circular is not to be treated as inconsistent with the provisions of statute and binding on the authorities - In respect of interest on "sticky advances" interest income is to be taxed only when actually received as prescribed by CBDT Circular - The law as laid down in UCO Bank is that in terms of CBDT Circular the interest is to be added as income only when actually received or credited in respect of the "sticky advances" while making assessment for a financial institution – Following Vashist Chay Vyapar Ltd. [2010 (11) TMI 88 - Delhi High Court] – the interest income relatable to NPA advances did not accrue to the assessee - Decided against Revenue.
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