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2018 (3) TMI 56 - SUPREME COURT
Accrual of income - interest on inter corporate deposits - Decision of HC [2010 (11) TMI 88 - Delhi High Court] challenged - Held that:- the consideration of the question has been given a full and meaningful reasoning and we agree with the same. - SC dismissed the revenue appeals.
HC has held that, The assessee-company being NBFC is governed by the provisions of the RBI Act. In such a case, interest income cannot be said to have accrued to the assessee having regard to the provisions of section 45Q of the RBI Act and Prudential Norms issued by the RBI in exercise of its statutory powers. As per these norms, the ICD had become NPA and on such NPA where the interest was not received and possibility of recovery was almost nil, it could not be treated to have been accrued in favour of the assessee.