https://www.taxtmi.com/caselaws?id=27241 Under the mercantile system, interest on sticky loans that has legally accrued remains taxable even if credited to an interest suspense account, because a mere book transfer does not defeat accrual. A change from mercantile to cash accounting must be a genuine abandonment of the former method and adoption of a regular cash basis; a shift in account-head presentation is insufficient. The Reserve Bank of India circular, aimed at preventing inflated profits in financial statements, and the Board's letter did not confer tax exemption or override income-tax liability. Accrued interest therefore remained assessable under the assessee's regular accounting method. en-us Wed, 24 Oct 1984 00:00:00 +0530 Thu, 11 Feb 2010 16:27:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=27241 Under the mercantile system, interest on sticky loans that has legally accrued remains taxable even if credited to an interest suspense account, because a mere book transfer does not defeat accrual. A change from mercantile to cash accounting must be a genuine abandonment of the former method and adoption of a regular cash basis; a shift in account-head presentation is insufficient. The Reserve Bank of India circular, aimed at preventing inflated profits in financial statements, and the Board's letter did not confer tax exemption or override income-tax liability. Accrued interest therefore remained assessable under the assessee's regular accounting method. Case-Laws Income Tax Wed, 24 Oct 1984 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=27241