https://www.taxtmi.com/highlights?id=95603 Interest liability accrued on a soft loan advanced by the State Government under an agreement was disallowed as an unascertained liability under section 37. Applying the mercantile system, interest became payable and had to be provided in the accounts notwithstanding that repayment had not commenced due to non-withdrawal of the full sanctioned amount. Since the loan was admittedly obtained and interest was contractually chargeable, the interest provision constituted an ascertained liability and could not be disallowed under section 37. The deduction for interest so provided was directed to be allowed, and the appeal was allowed. - ITAT en-us Thu, 01 Jan 2026 08:17:53 +0530 Thu, 01 Jan 2026 08:17:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=95603 Interest liability accrued on a soft loan advanced by the State Government under an agreement was disallowed as an unascertained liability under section 37. Applying the mercantile system, interest became payable and had to be provided in the accounts notwithstanding that repayment had not commenced due to non-withdrawal of the full sanctioned amount. Since the loan was admittedly obtained and interest was contractually chargeable, the interest provision constituted an ascertained liability and could not be disallowed under section 37. The deduction for interest so provided was directed to be allowed, and the appeal was allowed. - ITAT Highlights Income Tax Thu, 01 Jan 2026 08:17:53 +0530 https://www.taxtmi.com/highlights?id=95603