https://www.taxtmi.com/caselaws?id=264127 Interest on non-performing assets of a co-operative bank was not taxable on accrual basis where the advances were doubtful and the income had not really arisen during the year. Because the bank was outside the special rule in section 43D, the issue was governed by general accrual principles, but the mercantile system alone did not create taxable income. The CBDT circular issued under section 119 and RBI prudential norms were treated as relevant to determining whether real income had accrued. Interest kept out of the profit and loss account and carried in the balance sheet was therefore treated as not having accrued, and the addition was deleted. en-us Fri, 28 Aug 2015 00:00:00 +0530 Thu, 17 Sep 2015 14:27:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=264127 Interest on non-performing assets of a co-operative bank was not taxable on accrual basis where the advances were doubtful and the income had not really arisen during the year. Because the bank was outside the special rule in section 43D, the issue was governed by general accrual principles, but the mercantile system alone did not create taxable income. The CBDT circular issued under section 119 and RBI prudential norms were treated as relevant to determining whether real income had accrued. Interest kept out of the profit and loss account and carried in the balance sheet was therefore treated as not having accrued, and the addition was deleted. Case-Laws Income Tax Fri, 28 Aug 2015 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=264127