Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2010 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (1) TMI 746 - HC - Income TaxAccrual of Interest on loans - Real income or not - Accrual of income u/s 5 - Prima facie adjustment u/s 143(1) - held that:- If the assessee had not chosen to write off the amount lent to the other company and as long it is shown as outstanding amount and with an agreement to receive interest at 21 per cent per annum as the outstanding amount, accrual of interest on adopting the mercantile system of accounting is inevitable. - Accrual of income should definitely be brought to tax in terms of s. 5 of the Act. - When such is the legal position, there was no choice for the assessing authority but to add back this amount as part of the income, though the assessee might have claimed this as not a real income or on any other basis. - The assessing authority was bound to reject the claim of the assessee that a sum of Rs.74.75 lakhs did not constitute income for the reason that it was not real income etc. - Decided in favor of revenue.
|