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2014 (11) TMI 221 - HC - Income TaxEffect of amendment to section 145 - Interest on broken period as interest not accrued – Scope of total income - Held that:- It is declared U/s.5 of the Act that when interest is accrued or deemed to have been accrued, it is liable to tax - The word ‘accrued’ has defined the legal connotation - The interest that becomes due or liable to be payable whether or not it is paid, the interest is accrued or deemed to have been accrued - If the interest does not become due and not liable to pay such part of the interest arise, it cannot be said that the interest has become accrued - the income which has become due and payable should alone be considered as income accrue d and that should be offered as tax - The fact that the assessee in its internal books of accounting mentions the proportionate interest, which is entitled to receive, in its balance sheet for the purpose of profit and loss cannot be deemed as income accrued, unless such income has become due and payable – there was no inconsistency between the amended provisions of Sections 145 and 5 of the I.T. Act - Merely because in the books of accounts, the interest income, which is not due and payable is shown in the account of the assessee - That itself will not give right to A.O to tax unless it has become due and payable as per provisions of Section 5 of the I.T. Act - the AO has to redo the assessment regarding interest on the Government securities – Decided against revenue.
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