https://www.taxtmi.com/caselaws?id=397879 Overdue interest on non-performing assets was held not taxable on mere accrual where recovery remained uncertain and RBI prudential norms governed income recognition. Although the assessee cooperative bank followed the mercantile system, the Court applied the principle that RBI directions under the Reserve Bank of India Act override notional accrual for NPAs, so such interest does not become real income until actually received or recoverable. Section 43D of the Income-tax Act was later amended to include cooperative banks, but for the relevant year the controlling test was whether real income had accrued. The issue was answered in favour of the assessee and against the Revenue. en-us Mon, 27 Jul 2020 00:00:00 +0530 Fri, 13 Aug 2021 13:16:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=397879 Overdue interest on non-performing assets was held not taxable on mere accrual where recovery remained uncertain and RBI prudential norms governed income recognition. Although the assessee cooperative bank followed the mercantile system, the Court applied the principle that RBI directions under the Reserve Bank of India Act override notional accrual for NPAs, so such interest does not become real income until actually received or recoverable. Section 43D of the Income-tax Act was later amended to include cooperative banks, but for the relevant year the controlling test was whether real income had accrued. The issue was answered in favour of the assessee and against the Revenue. Case-Laws Income Tax Mon, 27 Jul 2020 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=397879