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2011 (1) TMI 761 - HC - Income TaxAccrued interest - The assessee/appellant before the accounting year ended 31st March 1988 granted loan to one M/s. Swan Mills Industries. The said loan amount was repayable, however, the same was not paid - Therefore, there has been accrual of interest on the said loan amounting to Rs. 16,27,059 even though the assessee company did not reflect it in the profit and loss account - The question is arise whether the amount of interest accrued on the loan should be included in the assessment as being an income despite the fact that the BIFR had sanctioned a scheme under the Sick Industrial Companies (Special Provision) Act, 1985 (in short SICA) and further after approval of the Board of Directors of the assessee company, for not showing the said income of interest amount in the profit and loss account - Since date of referring the said SML to BIFR and further scheme having been framed and particularly when the said interest income has not been shown in the accounts at all, it cannot be said that income has accrued for the purpose of taxation - Accordingly allow the appeal and direct the Assessing Officer to exclude the interest income on the said loan as it has become sticky from the previous accounting year that is 1989-90 and also subsequent years - Decided in favour of assessee.
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