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2017 (7) TMI 1418 - AT - Income TaxInterest due on ‘Non-Performing Assets’ - CIT deleting the addition made by the AO holding that the interest due on ‘Non-Performing Assets’ was taxable as the Co-op Bank was following mercantile system of Accounting except with regard to the interest pertaining to NPAs - HELD THAT:- As per CIT it is to taxed in the year of actual receipt even though it is following mercantile system of Accounting.at the assessee is a Co-operative Society which is engaged in the business of banking and has been following the directions of the Apex Bank and according to that interest due on NPAs had to be accounted for as income on actual receipts basis. Even otherwise, AS9 of ICAI on Revenue recognitions provide for, where there in uncertainty about the collection of Revenue, recognition of income or such Revenue is postponed to the extent of uncertainty involved, therefore, the assessee recognized Revenue on advances classified as NPAs on actual receipt basis and even the assessee consistently following the method of accounting in accordance with Section 145 of the Act. Therefore, on the aforesaid reasons and observations, we do not have any hesitation to uphold the action of the Ld. CIT(A) to dismiss the appeals of the Department. Hence, the instant appeals stand dismissed.
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