https://www.taxtmi.com/caselaws?id=66699 Under the mercantile system, unrealised finance charges, lease rentals and interest on NPAs were held not taxable on accrual where the assessee consistently followed RBI prudential norms, the Revenue had accepted that treatment in earlier years, and recognition of income would be only hypothetical while recovery of principal remained doubtful; the addition was deleted. The question whether unpaid interest from Godavari Capital Limited had been settled and written off required verification of the relevant material, so the matter was remanded to the Assessing Officer. Legal expenses for recovery proceedings were not allowable in the relevant year because they had not crystallised and were not debited to profit and loss, so the disallowance was upheld. en-us Fri, 30 Jul 2004 00:00:00 +0530 Tue, 11 Jun 2024 14:55:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=66699 Under the mercantile system, unrealised finance charges, lease rentals and interest on NPAs were held not taxable on accrual where the assessee consistently followed RBI prudential norms, the Revenue had accepted that treatment in earlier years, and recognition of income would be only hypothetical while recovery of principal remained doubtful; the addition was deleted. The question whether unpaid interest from Godavari Capital Limited had been settled and written off required verification of the relevant material, so the matter was remanded to the Assessing Officer. Legal expenses for recovery proceedings were not allowable in the relevant year because they had not crystallised and were not debited to profit and loss, so the disallowance was upheld. Case-Laws Income Tax Fri, 30 Jul 2004 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=66699