https://www.taxtmi.com/caselaws?id=34252 Accrued interest on a sticky loan was held not to be taxable where the amount was never actually received, recovery had become doubtful, and the loan was ultimately settled for a lower sum. Although the assessee followed the mercantile system, the real income principle prevailed over a mere book entry because the full interest was not realistically realizable. The fact that substantial interest had already been offered to tax in earlier years also supported the view that taxing the disputed balance would not reflect true income. The operative effect is that notional or unrealizable accrued interest on doubtful recovery does not constitute taxable income. en-us Wed, 15 Jul 2009 00:00:00 +0530 Tue, 11 Nov 2025 18:25:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=34252 Accrued interest on a sticky loan was held not to be taxable where the amount was never actually received, recovery had become doubtful, and the loan was ultimately settled for a lower sum. Although the assessee followed the mercantile system, the real income principle prevailed over a mere book entry because the full interest was not realistically realizable. The fact that substantial interest had already been offered to tax in earlier years also supported the view that taxing the disputed balance would not reflect true income. The operative effect is that notional or unrealizable accrued interest on doubtful recovery does not constitute taxable income. Case-Laws Income Tax Wed, 15 Jul 2009 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=34252