https://www.taxtmi.com/caselaws?id=11966 Interest on sticky loans could not be brought to tax on accrual basis where the bank had consistently followed a hybrid method of accounting, under which such interest was recognised on receipt basis and that method had been accepted by the Department; the Court held that, absent rejection of the accounting method on a legally sustainable ground, the income had to be taxed in accordance with the regularly followed system. Penal interest paid to the Reserve Bank of India under the Banking Regulation Act was held to be penal in character rather than a normal business expense, so its deduction was denied under the Income-tax Act as allowing it would sanction a statutory breach and offend public policy. en-us Thu, 05 Dec 2002 00:00:00 +0530 Sun, 14 Feb 2010 10:19:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=11966 Interest on sticky loans could not be brought to tax on accrual basis where the bank had consistently followed a hybrid method of accounting, under which such interest was recognised on receipt basis and that method had been accepted by the Department; the Court held that, absent rejection of the accounting method on a legally sustainable ground, the income had to be taxed in accordance with the regularly followed system. Penal interest paid to the Reserve Bank of India under the Banking Regulation Act was held to be penal in character rather than a normal business expense, so its deduction was denied under the Income-tax Act as allowing it would sanction a statutory breach and offend public policy. Case-Laws Income Tax Thu, 05 Dec 2002 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=11966