https://www.taxtmi.com/caselaws?id=26760 Under the mercantile system, interest becomes taxable when it accrues, not when it is actually received, so a later compromise and relinquishment did not alter taxability once the right to interest had arisen. The assessee had not disclaimed the interest before the relevant valuation date, and the subsequent compromise in the money suit could not retrospectively remove accrued income from assessment. The fact that the debtor was an unregistered firm also did not prevent assessment of the partner individually on the income attributable to her share. The interest amount was therefore treated as rightly taxable in the assessee's hands. en-us Fri, 07 Feb 1986 00:00:00 +0530 Mon, 08 Feb 2010 13:00:16 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=26760 Under the mercantile system, interest becomes taxable when it accrues, not when it is actually received, so a later compromise and relinquishment did not alter taxability once the right to interest had arisen. The assessee had not disclaimed the interest before the relevant valuation date, and the subsequent compromise in the money suit could not retrospectively remove accrued income from assessment. The fact that the debtor was an unregistered firm also did not prevent assessment of the partner individually on the income attributable to her share. The interest amount was therefore treated as rightly taxable in the assessee's hands. Case-Laws Income Tax Fri, 07 Feb 1986 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=26760