Interest on NPAs not taxable on accrual basis

Bajaj Finance Limited Vs PCIT-3 (ITAT Pune)

ITAT Pune held that it is settled legal position that interest on (Non-Performing Assets) NPAs cannot be taxed on accrual basis.

Facts- Assessee mainly contested that the learned PCIT erred in holding that interest on NPA is taxable on accrual basis disregarding the well-settled principle of real income theory as has consistently been upheld in the Appellant’s own case by the Appellate Authorities in the earlier years.

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