https://www.taxtmi.com/caselaws?id=767424 Interest on non-performing asset accounts of a co-operative bank is not taxable on accrual merely because the bank follows mercantile accounting, where RBI income-recognition norms apply. By virtue of section 45Q of the Reserve Bank of India Act, 1934, those directions override contrary accounting treatment, so interest on NPAs shown in the balance sheet but not credited to the profit and loss account is assessable only on receipt basis. The ITAT Chennai held that the addition of accrued NPA interest was unsustainable and directed its deletion. en-us Fri, 07 Mar 2025 00:00:00 +0530 Tue, 18 Mar 2025 08:35:17 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=767424 Interest on non-performing asset accounts of a co-operative bank is not taxable on accrual merely because the bank follows mercantile accounting, where RBI income-recognition norms apply. By virtue of section 45Q of the Reserve Bank of India Act, 1934, those directions override contrary accounting treatment, so interest on NPAs shown in the balance sheet but not credited to the profit and loss account is assessable only on receipt basis. The ITAT Chennai held that the addition of accrued NPA interest was unsustainable and directed its deletion. Case-Laws Income Tax Fri, 07 Mar 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=767424