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2019 (3) TMI 1551 - HC - Income TaxMethod of accounting - recognition of income - interest on non-performing assets - Taxability of Apportionment of Income on Sum of Digits (SOD) Method or Internal Rate of Return (IRR) Method - HELD THAT:- Appeals were admitted, are now covered by a decision of this Court in the case of Assessee itself in Sundaram Finance Limited [2012 (9) TMI 373 - SUPREME COURT] assessee has classified its assets on the basis of the notification issued by the RBI and found that certain assets are coming under the category of non-performing assets. From such non-performing assets, the assessee has not recognised any income in consonance with the notification issued by the RBI and AS-9 issued by the ICAI. Therefore, the assessee is justified in not recognising the income as such. Once that is the case, there is no occasion to consider whether the principle of accrual would arise or not. In view of the matter, we are of the considered view that the lower authorities have erred in treating the interest on non-performing assets as income of the assessee company for the asst. yr. 1998-99. We direct the AO to delete the said interest from the computation of taxable income. The interest from such non-performing assets. As will be taxed in the appropriate assessment years on the basis of actual receipt. The issue of interest from non-performing assets is therefore decided in favour of the assessee
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