https://www.taxtmi.com/caselaws?id=12373 The dominant issue was whether, in computing a bank's business income, net broken-period interest paid on purchase of dated Government securities was deductible, turning on whether the discount/accretion on such securities was assessable as "interest on securities" under s.18 or as business income under s.28. The HC held that where the bank consistently valued securities and recognized time-based accretion as trading profit, its method of accounting disclosed true and proper income and caused no revenue loss; therefore, the Department should not recharacterize the transaction under s.18 to deny deduction. Consequently, once income was assessed under s.28, broken-period interest received had to be taxed and broken-period interest paid had to be allowed as a deduction; the contrary view in a prior HC decision was held inapplicable. en-us Wed, 25 Sep 2002 00:00:00 +0530 Thu, 25 Dec 2025 12:56:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=12373 The dominant issue was whether, in computing a bank's business income, net broken-period interest paid on purchase of dated Government securities was deductible, turning on whether the discount/accretion on such securities was assessable as "interest on securities" under s.18 or as business income under s.28. The HC held that where the bank consistently valued securities and recognized time-based accretion as trading profit, its method of accounting disclosed true and proper income and caused no revenue loss; therefore, the Department should not recharacterize the transaction under s.18 to deny deduction. Consequently, once income was assessed under s.28, broken-period interest received had to be taxed and broken-period interest paid had to be allowed as a deduction; the contrary view in a prior HC decision was held inapplicable. Case-Laws Income Tax Wed, 25 Sep 2002 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=12373