Accrued Income Cannot Be Deferred Just Because Receipt Is Delayed – ITAT Upholds Taxability on Mercantile Basis

Quantum Real Est & Prop Dev India Pvt. Ltd. Vs ACIT (ITAT Mumbai) The Mumbai ITAT upheld reopening and addition of ₹50 lakh towards accrued interest income, holding that an assessee following the mercantile system of accounting cannot defer taxation merely because the amount was actually received in a later year. The Tribunal noted that the assessee was entitled to receive ₹1 crore interest income during AY 2007-08 but had offered only ₹50 lakh in that year and disclosed the balance ₹50 lakh in AY 2009-10 upon actual receipt. The assessee argued that due to ongoing legal proceeding...