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2016 (11) TMI 1187 - HC - Income TaxMethod of accounting - recognition of additional finance charges on cash basis - interest in relation to bad or doubtful debts - Held that:- Overdue charges can be charged to tax only on cash receipt basis and not on accrual basis - Decision in the case of Commissioner of Income Tax v. Annamalai Finance Limited, [2009 (11) TMI 11 - MADRAS HIGH COURT] and CIT v. Annamalai Finance Limited, [2004 (10) TMI 51 - MADRAS High Court ] - Decided in favor of assessee. Additional finance charges to tax under Section 43D - interest in relation to bad or doubtful debts - Held that:- Section 43D of the said Act, if a close look is given, is attracted to cases of Public Financial Institutions, Scheduled Banks, State Financial Corporations, State Industrial Investment Corporations or Public Companies, which charge interest in relation to bad or doubtful debts. It is not in dispute that the assessee before us is not a Schedule Bank or the State Financial Corporation or State Industrial Investment Corporation nor viz., a Public Financial Institution, as defined clearly in Section 4A of the Indian Companies Act, 1956. The assessee does not fall in any one of those categories specified. Consequently, the assessee's case does not fall within the sweep of clause (a) of Section 43D of the Income Tax Act, 1961.
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