2002 (7) TMI 90

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.... Bank of Indore, and arise from two similar orders passed in I.T.A. Nos. 470/Ind of 1988 and 471/Ind of 1988, dated December 6, 1994, for the assessment years 1983-84 and 1984-85, whereby the following questions, said to be questions of law, have been referred to this court for answer: "(i) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in upholding the rejection of method of accounting of interest on sticky loans credited to 'Interest Suspense Account' consistently followed by the assessee in the assessment years 1961-62 onwards and accepted by the Department? (ii) Whether, on the facts and circumstances of the case, the Appellate Tribunal was justified in upholding the taxation of in....

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....9, 1984, issued a circular directing that "Interest in respect of doubtful debts credited to suspense account by the banking companies will be subjected to tax but interest charged in an account where there has been no recovery for three consecutive accounting years will not be subjected to tax in the fourth year and onwards. However, if there is any recovery in the fourth year or later the actual amount recovered only will be subjected to tax in the respective years. This procedure will apply to the assessment year 1979-80 and onwards. By this circular an earlier circular dated June 20, 1978, was modified. It was, thus, contended that the circular which is binding on the assessing authority as also on the Tribunal makes the said interest n....