https://www.taxtmi.com/caselaws?id=239402 The High Court ruled in favor of the assessee, a company of the State Government, allowing the deduction under Section 36(1)(iii) of the Income Tax Act for provision of interest liability on loans received from the State Government, even though the interest had not been paid but was accounted for in the books. The Court held that under the mercantile system of accounting, the provision for payable interest sufficed for claiming the deduction. The Court dismissed the department's appeal, affirming the Tribunal's decision to permit the deduction on an unpaid basis, rejecting the argument that only paid interest could be deducted. en-us Mon, 07 Oct 2013 00:00:00 +0530 Wed, 13 Nov 2013 09:56:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=239402 The High Court ruled in favor of the assessee, a company of the State Government, allowing the deduction under Section 36(1)(iii) of the Income Tax Act for provision of interest liability on loans received from the State Government, even though the interest had not been paid but was accounted for in the books. The Court held that under the mercantile system of accounting, the provision for payable interest sufficed for claiming the deduction. The Court dismissed the department's appeal, affirming the Tribunal's decision to permit the deduction on an unpaid basis, rejecting the argument that only paid interest could be deducted. Case-Laws Income Tax Mon, 07 Oct 2013 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=239402