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2014 (5) TMI 42 - AT - Income TaxClaim of benefit of section 43D of the Act – Assessee not being a NBFC – Held that:- The assessee qualifies both the conditions to fall within the meaning of a ‘State Industrial Investment Corporation’ u/s.43D of the Act - The assessee is a State Government Company and is providing long term finance for industrial projects – the decision in assessee’s own case for the previous year’s has been followed - the assessee had not charged in its books of accounts any interest on the loans classified by it as non-performing assets - It is not a case where assessee had credited such interest and then claimed write off, Assessee might have been following mercantile system of accounting. The prudential norms prescribed by RBI, for non-banking financial Company u/s 45 Q of the RBI Act, made it obligatory for the assessee to classify the loans on which interest was not received for a period exceeding six months, as non-performing assets - Once it was so classified, interest could not be charged in its accounts and taken as income – Relying upon CIT Vs. Elgi Finance Ltd [2007 (6) TMI 180 - MADRAS High Court] - assessee was justified in not recognizing income from non-performing assets in consonance with the notification issued by RBI – thus, there is no reason to interfere in the findings of the CIT(A) – Decided against Revenue.
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