Interest on sticky loans/ NPAs taxable on receipt basis

PCIT Vs The Kangra Central Co-op Bank Ltd. (Himachal Pradesh High Court)

Himachal Pradesh High Court held that Co-operative Bank is liable to tax the interest on the sticky loans/NPAs on receipt basis

Facts-

The assessee is a non-scheduled bank. The assessing officer noted that the assessee had not credited/recognized interest on NPAs, although, it was following mercantile system of accounting.

Notice was issued to the assessee with regard to the assessment years 2012-13 and 2013-14. The assessee was asked to explain as to why the interest on loans had not been added to its income.

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