https://www.taxtmi.com/caselaws?id=795327 A change from the mercantile to the cash system for interest on loans is permissible where it is bona fide, serves a legitimate purpose, is consistently followed, complies with applicable income-computation standards, and is properly disclosed. The notes state that the borrower's financial distress caused non-payment of interest and that accrual taxation would adversely affect cash flow. As no material showed that the change lacked legitimacy, involved frequent switching, or was undisclosed, unpaid interest was not taxable on an accrual basis. en-us Mon, 08 Jun 2026 00:00:00 +0530 Tue, 21 Jul 2026 08:32:10 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=795327 A change from the mercantile to the cash system for interest on loans is permissible where it is bona fide, serves a legitimate purpose, is consistently followed, complies with applicable income-computation standards, and is properly disclosed. The notes state that the borrower's financial distress caused non-payment of interest and that accrual taxation would adversely affect cash flow. As no material showed that the change lacked legitimacy, involved frequent switching, or was undisclosed, unpaid interest was not taxable on an accrual basis. Case-Laws Income Tax Mon, 08 Jun 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=795327