https://www.taxtmi.com/caselaws?id=370099 Interest on non-performing assets in the hands of a co-operative bank was held not to be taxable on accrual basis where RBI prudential norms prohibit income recognition until receipt. The HC applied the real income principle, noted that Section 45Q of the Reserve Bank of India Act gives overriding effect to RBI directions on income recognition, and distinguished income recognition from computation of taxable income. It also considered Section 43D of the Income-tax Act and Rule 6EA, but held that the assessee could not be taxed on hypothetical accrued interest merely because it followed the mercantile system. Taxability arose only on actual receipt. en-us Mon, 24 Sep 2018 00:00:00 +0530 Fri, 11 Jan 2019 10:17:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=370099 Interest on non-performing assets in the hands of a co-operative bank was held not to be taxable on accrual basis where RBI prudential norms prohibit income recognition until receipt. The HC applied the real income principle, noted that Section 45Q of the Reserve Bank of India Act gives overriding effect to RBI directions on income recognition, and distinguished income recognition from computation of taxable income. It also considered Section 43D of the Income-tax Act and Rule 6EA, but held that the assessee could not be taxed on hypothetical accrued interest merely because it followed the mercantile system. Taxability arose only on actual receipt. Case-Laws Income Tax Mon, 24 Sep 2018 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=370099