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2020 (8) TMI 822 - HC - Income TaxOverdue interest on non performing assets - Taxability on accrual basis - Revenue recognition - HELD THAT:- The earliest among the decisions on the said point in favour of the assessee is by the High Court of Karnataka in the case of CIT Vs. Canfin Homes Ltd [2011 (8) TMI 178 - KARNATAKA HIGH COURT] . Also see THE LUDHIANA CENTRAL CO-OP. BANK LTD., LUDHIANA [2018 (11) TMI 442 - PUNJAB AND HARYANA HIGH COURT] The Revenue, in the raised identical contentions as raised before us stating that the case of the assessee was to be dealt with for the purpose of taxability as per the provisions of the Act and not as per the provisions of the RBI Act, which was the accounting method that the assessee was supposed to follow. The contention was rejected on the ground that even under the Act, interest income had not accrued. The Court further noted that the submission of the Revenue was entirely based on the judgment of the Hon’ble Supreme Court in the case of Southern Technologies Ltd., and proceeded to explain as to what was the decision and the effect of the said decision with regard to the assessee/cooperative bank in the paragraph quoted above. The above mentioned decision in the case of Vasisth Chay Vyapar Ltd [2010 (11) TMI 88 - DELHI HIGH COURT] was affirmed by the Hon’ble Supreme Court in the [2018 (3) TMI 56 - SUPREME COURT]. In the light of the above discussion, the substantial question of law framed in this case has to be necessarily answered in favour of the assessee and against the Revenue.
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