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TMI Blog2012 (6) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 2001-02 on 31-10-2001 declaring loss of Rs. 1,70,04,080/-. The case was selected for scrutiny under section 143(2)(i) for the limited purpose of verifying the issue of assessability of income returned whether under the head Business or Speculation. A notice was issued. The assessee entered appearance and put forth his case. After considering the objections of the assessee, the assessing authority held that the loss claimed by the assessee in the return in respect of its business activity is speculation loss under deeming provisions of Explanation to section 73. The assessing authority, in respect of non-performing assets when the assessee had not offered the interest due therefrom for taxation bases on the Guideline ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in respect of which such tax was deducted was not offered for taxation and was not assessed for the assessment year 2001-02, is not in accordance with the provisions of section 199 of the Income-tax Act, 1961. Therefore he directed the assessing officer to give credit only to the proportionate amount of tax deducted at source in terms of section 199 of the Act. Aggrieved by the said order the Revenue preferred the appeal to the Tribunal. The Tribunal declined to interfere with the order of the appellate authority in respect of the investment made by the assessee in shares which were not treated as stock-in-trade but as investment in capital assets in view of its earlier judgment on the said point. Insofar as the interest income not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the consequential loss should be allowed as a business loss when the assessee was holding these shares as an investment capital and not as stock-in-trade? 2. Whether the finding of the Income Tax Appellate Tribunal reversing the order passed by the Appellate Authority holding that interest received on loans and advances can be accounted on receipt basis and not on accrual basis as per the regular mercantile system of accounting maintained by the assessee by applying Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998, issued by the RBI, is perverse and arbitrary?" The material on record discloses that the authorities have concurrently held that the assessee was carrying on the business in sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting and in his accounts he shows a particular income as accruing, whether that amount is really accrued or not is liable to bring the said income to tax. His accounts should reflect true and correct statement of affairs. Merely because the said amount accrued was not realised immediately cannot be a ground to avoid payment of tax. But, if in his account it is clearly stated though a particular income is due to him but it is not possible to recover the same, then it cannot said to have been accrued and the said amount cannot be brought to tax. In the instant case we are concerned with a non-performing asset. As the definition of non-performing asset shows an asset becomes non-performing when it ceases to yield income. Non-performing asset i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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