https://www.taxtmi.com/caselaws?id=795839 Notional interest cannot be assessed on outstanding balances under the mercantile system unless interest income has actually accrued. Despite the general accrual principle, the concerns had not paid interest for two years, one had ceased operations and the other had been wound up, and no recoveries were made. Their relationship with the assessee's partners did not by itself establish deliberate waiver of interest or accrual of income. The notional-interest addition was therefore unsustainable and deleted. en-us Wed, 15 Jul 2026 00:00:00 +0530 Tue, 28 Jul 2026 08:30:44 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=795839 Notional interest cannot be assessed on outstanding balances under the mercantile system unless interest income has actually accrued. Despite the general accrual principle, the concerns had not paid interest for two years, one had ceased operations and the other had been wound up, and no recoveries were made. Their relationship with the assessee's partners did not by itself establish deliberate waiver of interest or accrual of income. The notional-interest addition was therefore unsustainable and deleted. Case-Laws Income Tax Wed, 15 Jul 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=795839