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2014 (7) TMI 139 - HC - Income TaxAccrual of interest on Non-Performing Assets – Held that:- The assessee had credited only an amount as interest on loans - AO was of the view that the interest accrued on the entire loans should have been shown as income - The details as to how the interest income on accrual basis should have been disclosed are referred to by the Tribunal - The Tribunal held that the income was not realized - the assessee follows the mercantile system of accounting - the loan advanced by the assessee which was in NBFC had become nonperforming asset - Commissioner of Income tax Versus Vasisth Chay Vyapar Ltd. & others [2010 (11) TMI 88 - Delhi High Court] - once there is no dispute that the interest considered as accrued was a non-performing asset as per Reserve Bank of India guidelines, then, the income from this interest did not accrue to the assessee – the income was not and cannot be assessed on accrual basis - once the view taken by the Tribunal was possible the income has not been realized by the assessee, the addition was rightly deleted – Decided against Revenue.
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