https://www.taxtmi.com/caselaws?id=64804 Under the mercantile system, interest on advances does not accrue for tax purposes where recovery is genuinely doubtful and no real income has arisen. On the facts, the debtor correspondence and dishonoured cheque showed that both principal and interest were uncertain of recovery, so mere book entries could not create taxable income. Applying the real income principle, the addition for accrued interest was not justified and was deleted. en-us Tue, 15 Feb 2005 00:00:00 +0530 Thu, 10 Feb 2011 10:11:18 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=64804 Under the mercantile system, interest on advances does not accrue for tax purposes where recovery is genuinely doubtful and no real income has arisen. On the facts, the debtor correspondence and dishonoured cheque showed that both principal and interest were uncertain of recovery, so mere book entries could not create taxable income. Applying the real income principle, the addition for accrued interest was not justified and was deleted. Case-Laws Income Tax Tue, 15 Feb 2005 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=64804