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2015 (2) TMI 289 - AT - Income TaxIncome recognition - unrealizable interest on non-performing advances - not recognized as revenue by the assessee bank following theory of real income while determining accrued income as per provisions of section 145 - Held that:- Neither of the parties have placed material on record to demonstrate that the verification of accrual of interest has been decided on the basis of examination of each account. Respectfully following the decision of Hon’ble Madras High Court in the case of Sakthi Finance Ltd. (2013 (3) TMI 266 - MADRAS HIGH COURT) are of the view that the accrual of interest is a matter of fact which needs to be decided on the basis of examination of the status of each party. We therefore restore the issue back to the file of A.O to decide the issue de novo - Decided in favour of assessee for statistical purposes. Addition to an amount of interest income - Held that:- it is Assessee’s submission that the interest of ₹ 40,35,373/- has already been offered to tax in earlier years. Apart from the submissions that the amount has been offered to tax in earlier years, no details or break up has been placed before us to demonstrate as to when the interest was offered to tax in earlier year. We also find that A.O has also not given any finding about as to when the amounts was claimed by the assessee as deduction and therefore the amount claimed by the Assessee is double deduction. We are therefore of the view that the issue needs re-examination. Restore the issue back to the file of A.O to decide the issue afresh - Decided in favour of assessee for statistical purposes. Disallowance of certain expense - Held that:- A.O had disallowed the expenses for the reason that the Assessee could not explain the discrepancy between the amount appearing in the ledger and its Profit and Loss account. On the other hand we further find that CIT(A) has restricted the disallowance to 20% but while restricting the disallowance to 20%, there is no finding of CIT(A) about the discrepancy which has not been explained by the Assessee. In view of the aforesaid facts and the contentions of the ld. A.R, we are of the view that in fairness, the matter needs to be re-examined and we therefore restore the issue back to the file of A.O to decide the issue afresh after giving adequate opportunity of hearing to the Assessee. - Decided in favour of assessee for statistical purposes.
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