Deduction on NPAs: Tax Laws vs. NHB Guidelines - Statutory Conditions Prevail over Prudential Norms.

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....Section 43D and Rule 6EB form a comprehensive code for deduction on account of non-performing assets (NPAs), distinct from NHB guidelines classifying NPAs. The court held that the tax provisions allow discretion to follow or not follow NHB guidelines when revised. The purpose of NPA classification by NHB differs from non-recognition of income under tax laws. The real income principle is inapplicable to Section 43D deductions, which must satisfy statutory conditions, separate from NHB's prudential norms. The Supreme Court upheld the High Court's decision, dismissing the petition and vacating interim relief granted earlier.....