Interest on NPAs of NBFCs not Taxable on Accrual Basis: SC

CIT Vs. Ms. Vasisth Chay Vyapar Ltd. (Supreme Court of India)

Hon’ble Supreme Court dismisses a departmental appeal in CIT v. Vasisth Chay Vyapar Ltd and held that the interest income earned by Non-Banking Financial Companies (NBFCs) on non-performing assets (NPAs) should not be taxed on the accrual basis.

FULL TEXT OF THE SUPREME COURT JUDGMENT / ORDER IS AS FOLLOWS:-

Leave granted.

Having gone through the impugned judgment in the aforesaid appeals, we are of the view that the consideration of the question has been given a full and meaningful reasoning and we agree with the same.

As a result, all the aforesaid appeals are dismissed.

However, in Civil Appeal No. 998 of 2013 and SLP(C) No. 28678-28682 of 2017, learned counsel appearing for the appellant state that there is an error apparent in the judgment as the facts are similar to the facts of all other cases whereas the High Court has segregated his case and stated that his facts are different. We record the statement and permit the appellant to file a review petition before the High Court. However, if such a review petition is filed within a period of four weeks from today, the same shall be disposed of on merits.

O R D E R

Delay condoned, if any.

The appeals are dismissed in terms of the signed order.

Pending applications, if any, shall stand disposed of.