https://www.taxtmi.com/caselaws?id=330993 Interest on non-performing assets in a co-operative bank was treated as taxable only when actually received, because RBI prudential norms on income recognition governed the timing of recognition even though the assessee followed the mercantile system. The distinction between income recognition and tax computation was material: the Income-tax Act governed computation of taxable income, but the RBI framework determined when interest on NPAs could be recognised as income. The principle of real income, rather than hypothetical accrual, applied where collection was uncertain. On that basis, interest on NPAs was not taxable on accrual basis in the assessee's hands. en-us Fri, 05 Aug 2016 00:00:00 +0530 Sat, 03 Feb 2018 21:12:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=330993 Interest on non-performing assets in a co-operative bank was treated as taxable only when actually received, because RBI prudential norms on income recognition governed the timing of recognition even though the assessee followed the mercantile system. The distinction between income recognition and tax computation was material: the Income-tax Act governed computation of taxable income, but the RBI framework determined when interest on NPAs could be recognised as income. The principle of real income, rather than hypothetical accrual, applied where collection was uncertain. On that basis, interest on NPAs was not taxable on accrual basis in the assessee's hands. Case-Laws Income Tax Fri, 05 Aug 2016 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=330993