Accrual taxation of loan interest rejected where identical facts had already led the Tribunal to disallow the addition.

Interest on an outstanding loan was held not to be taxable on accrual basis under the assessee's mercantile system, because the Tribunal had already reached the same conclusion on identical facts in earlier years and no distinguishing circumstance was shown. Following its prior orders, it found no basis to disturb the deletion of the addition, and the relief was upheld.

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Issues: Whether the disputed interest on the outstanding loan could be assessed as income on accrual basis under the assessee's mercantile system of accounting.

Analysis: The Tribunal noted that in earlier years on the same facts it had consistently held that the interest on the loan could not be brought to tax on accrual basis. The present year involved the same loan, the same reasoning, and no new distinguishing circumstance warranting a different view. Following its earlier orders, the Tribunal found no justification to interfere with the order deleting the addition.

Conclusion: The disputed interest was not taxable on accrual basis, and the deletion of the addition was upheld.

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