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2012 (8) TMI 18 - HC - Income TaxTaxation on accrual of interest income - the mercantile system of accounting - Held that:- The assessee received Rs.11 lakhs in the liquidation proceedings consequent on the winding up of the company on 18.03.2008 with effect from 22.04.2002. Therefore, even in respect of the debt written off in 2007, the assessee had received Rs.11 lakhs, which may not be in full quit of the amount due and payable to the assessee herein - that the assessee was following the mercantile system of accounting, hence, the accrual theory of interest income was to be assessed in the year in which it had accrued and had become due. Thus, even though the assessee had followed the mercantile system of accounting, the materials placed before the AO and before the Tribunal, do not, in any manner, advance the cause of the assessee to substantiate its contention that the accrued interest was only hypothetical income and hence, not available for taxation - against assessee.
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