2002 (11) TMI 8

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....Interest-tax Act, 1974 ("the Act"), which reads thus: "Subject to the provisions of this Act, the chargeable interest of any previous year of a credit institution shall be the total amount of interest (other than interest on loans and advances made to other credit institutions) accruing or arising to the credit institution in that previous year: Provided that any interest in relation to categori....

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....e method of accounting regularly employed by the assessee, the Appellate Tribunal was correct in law in concluding that the Assessing Officer has rightly made the computation of the interest on accrual basis, rejecting the cash system of accounting accepted for the assessment under the Income-tax Act, 1961? (2) Whether, on the facts and circumstances of the case, on account of doctrine of incorpo....

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....le interest", in terms of section 5 of the Act was the total amount of interest accruing in the relevant previous year and, that there was no scope in the section to read "chargeable interest" as meaning the amount actually received in the relevant previous year. It appears to us that in arriving at this conclusion the High Court has overlooked the opening words of section 5 of the Act which make....

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..... The assessee, in the case before us, has followed the cash system of accounting in respect of the interest income. Learned counsel appearing on behalf of the assessee, therefore, has, in our opinion rightly, contended that section 5 of the Interest-tax Act would in the circumstances allow the calculation or computation of chargeable interest on the basis of the amount of interest actually receiv....