https://www.taxtmi.com/caselaws?id=258260 Interest on loans advanced by a non-banking financial company was treated as taxable on accrual because the assessee followed the mercantile system and produced no material showing contractual default, overdue interest, or valid classification of the advances as non-performing assets under RBI directions. The absence of repayment demand or legal steps to recall the loans weakened the claim that no income had arisen. Tax deduction at source by borrowers and their treatment of the interest as payable further supported accrual. The RBI prudential norms did not displace the Income-tax Act's accrual principle or the statutory charge to tax, so the claim of non-accrual based on real income was rejected. en-us Tue, 27 May 2014 00:00:00 +0530 Fri, 03 Apr 2015 21:58:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=258260 Interest on loans advanced by a non-banking financial company was treated as taxable on accrual because the assessee followed the mercantile system and produced no material showing contractual default, overdue interest, or valid classification of the advances as non-performing assets under RBI directions. The absence of repayment demand or legal steps to recall the loans weakened the claim that no income had arisen. Tax deduction at source by borrowers and their treatment of the interest as payable further supported accrual. The RBI prudential norms did not displace the Income-tax Act's accrual principle or the statutory charge to tax, so the claim of non-accrual based on real income was rejected. Case-Laws Income Tax Tue, 27 May 2014 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=258260