https://www.taxtmi.com/caselaws?id=399485 Interest received in advance on bill discounting under letters of credit was treated as taxable only on accrual under the mercantile system, not merely on receipt. Amounts collected upfront for a later period retained the character of liability until the corresponding income actually accrued, and where realisation or the due date extended beyond the accounting year, only the proportionate income attributable to that year could be taxed. The treatment was supported by the need to refund proportionate interest on early realisation and by regulatory directions on pre-payment and unexpired usance. The issue was decided in favour of the assessee. en-us Thu, 01 Oct 2020 00:00:00 +0530 Mon, 12 Oct 2020 12:18:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=399485 Interest received in advance on bill discounting under letters of credit was treated as taxable only on accrual under the mercantile system, not merely on receipt. Amounts collected upfront for a later period retained the character of liability until the corresponding income actually accrued, and where realisation or the due date extended beyond the accounting year, only the proportionate income attributable to that year could be taxed. The treatment was supported by the need to refund proportionate interest on early realisation and by regulatory directions on pre-payment and unexpired usance. The issue was decided in favour of the assessee. Case-Laws Income Tax Thu, 01 Oct 2020 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=399485