Interest on NPA of NBFC cannot be taxed for mere crossholding of debtor

CIT Vs. Brahmaputra Capital & Financial Services Ltd (Delhi High Court) The revenue argues that in respect of the three entities, the decision not to reflect revenue recognition, and treat the interest payable as NPA could not be allowed and the ITAT erred in holding that under RBI’s norms, the revenue recognition method adopted was in order. It was highlighted that there was cross shareholding of three entities which were given the credit facility which sets them apart from normal defaulting debtors. It was also submitted that the financial health of the three debtor companies was not e...