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2015 (1) TMI 1451 - AT - Income TaxAccrual of income - non disclosure of income from the loan advanced to Al-Haj Abdus Salam Barlaskar - HELD THAT:- AO had made addition only because the assessee was following mercantile system of accounting. It is a fact that the assessee had not received any income though it was entitled to get the interest from Al-Haj Abdus Salam Barlaskar. The principle of accountancy cannot takes place the theory of real income and in the case under consideration the assessee had to write off the loan finally during the AY 2008-09. Just because, the interest was due, it cannot be always presumed same had to be taxed. The agreement in question is effective till September, 2008 only i.e., for a period of three years. In these circumstances, if the assessee was not receiving interest, then in our opinion, the addition should not have been made just because it had accrued to the assessee as per the mercantile system of accounting. In the case of Eicher Ltd. [2009 (7) TMI 43 - DELHI HIGH COURT] the same principle has been propounded. - Decided in favour of assessee. Disallowance of interest expenditure - HELD THAT:- FAA has not given any reason for the disallowance. As his order is non-speaking, therefore, same has to be reversed. Decided in favour of assessee.
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