https://www.taxtmi.com/caselaws?id=186067 Interest on sticky loans of a non-banking financial company was not taxable on accrual basis where RBI prudential norms required income recognition to follow realizable income and not merely mercantile accounting. Section 45Q of the Reserve Bank of India Act gave overriding effect to Chapter III-B, so the RBI's accounting treatment prevailed for an NBFC governed by those norms. Where assets had become non-performing and recovery of interest was uncertain, income could not be treated as truly accrued. In that situation, section 145 of the Income-tax Act could not be used to assess hypothetical income on notional accrual. en-us Wed, 31 Oct 2012 00:00:00 +0530 Wed, 24 Jan 2018 18:23:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=186067 Interest on sticky loans of a non-banking financial company was not taxable on accrual basis where RBI prudential norms required income recognition to follow realizable income and not merely mercantile accounting. Section 45Q of the Reserve Bank of India Act gave overriding effect to Chapter III-B, so the RBI's accounting treatment prevailed for an NBFC governed by those norms. Where assets had become non-performing and recovery of interest was uncertain, income could not be treated as truly accrued. In that situation, section 145 of the Income-tax Act could not be used to assess hypothetical income on notional accrual. Case-Laws Income Tax Wed, 31 Oct 2012 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=186067