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2024 (4) TMI 254 - ITAT MUMBAIAccrual of income - Taxability of notional interest income credited by the assessee in his profit and loss account as per the requirement of Indian Accounting Standards - taxation under Real Income principle - contention of the assessee is that the income tax can be levied only on the real income and not on notional income - as submitted that the notional interest credited to the Profit and Loss account as per the requirement of Indian Accounting Standards cannot be considered as real income as there is no contractual obligation for the debtor to pay interest - CIT(A) deleted addition HELD THAT:- As decided in M/S. SHRIRAM PROPERTIES LIMITED [2023 (4) TMI 375 - ITAT CHENNAI] Tribunal accepted the contentions of the assessee that the above said income did not accrue to it. Thus the notional income credited to the profit and loss account cannot be said to have accrued to the assessee, when there is no contractual obligation to pay the same. In the instant case, it was not shown to us by the revenue that there existed a contractual obligation to collect interest from the debtors. Thus we hold that the notional interest income credited by the assessee to the profit and loss account as per the requirement of Indian Accounting Standard has not actually accrued to the assessee and hence the same is not liable for taxation under Real Income principle. Accordingly, we are of the view that the CIT(A) was justified in directing the Assessing Officer to exclude the same. Appeal filed by the Revenue is dismissed.
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