https://www.taxtmi.com/caselaws?id=254718 Interest on non-performing assets is not taxable on accrual merely because it appears in the profit and loss account where applicable banking, co-operative accounting and RBI prudential norms require separate presentation and recognise such interest on receipt basis. A book entry does not create taxable income unless income has actually accrued. Conversely, interest credited to an Agricultural Stabilization Fund constituted through appropriations from profits is an allocation of profit, not an expense incurred in carrying on business, and is therefore not deductible as business expenditure. The stated outcomes delete the NPA-interest addition but sustain the disallowance for fund interest, resulting in partial relief. en-us Mon, 29 Sep 2014 00:00:00 +0530 Mon, 29 Dec 2014 21:25:44 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=254718 Interest on non-performing assets is not taxable on accrual merely because it appears in the profit and loss account where applicable banking, co-operative accounting and RBI prudential norms require separate presentation and recognise such interest on receipt basis. A book entry does not create taxable income unless income has actually accrued. Conversely, interest credited to an Agricultural Stabilization Fund constituted through appropriations from profits is an allocation of profit, not an expense incurred in carrying on business, and is therefore not deductible as business expenditure. The stated outcomes delete the NPA-interest addition but sustain the disallowance for fund interest, resulting in partial relief. Case-Laws Income Tax Mon, 29 Sep 2014 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=254718