Bill discounting Income computable as per accounting method regularly employed

Karur Vysya Bank Ltd Vs ACIT (Madras High Court)

Facts-

Only matter involved is income received in advance in the nature of interest income on discounting of bills against letter of credit is to be taxed on receipt basis or accrual basis.

Assessee contended that there was no escapement of income. Assessee were following mercantile system of accounting as specified under the Companies Act and that the income was assessable in the year of receipt only when the cash basis was followed.

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