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2012 (11) TMI 756 - AT - Income TaxAddition on account of accrued interest – Assessee has given loan to unrelated party - Interest at 18% was taken as accrued upto 30.6.1996 and subsequently no amount was recognized as income in the books of account – Assessee contended that principal itself is doubtful for recovery, question of accounting interest as income does not arise – Held that:- As one of the fundamental principles of accounting that, as a measure of prudence and following the principle of conservatism, the incomes are not taken into account till the point of time that there is a reasonable degree of certainty of its realization, while all anticipated losses are taken into account as soon as there is a possibility, howsoever uncertain, of such losses being incurred. There is uncertainty in realizing the principle itself. The principles laid down in recognizing the income equally applies to the facts of the case. For these reasons, we are of the opinion that no notional interest can be brought to tax. Appeal decides in favour of assessee
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