The assessee, a non-banking institution, which is regulated by the Reserve Bank of India, is not assessable on the interest income earned on non-performed assets on accrual basis, since under section 45Q of the RBI Act, when such income is not received and the possibility of recovery is almost NIL, it cannot be said to have accrued to such institution. (AY. 2009-10)
Bhind District Co-operative Central Bank Ltd. v. IT Departments (2019) 177 DTR 196 / 106 taxmann.com 396 /309 CTR 316 / (2020)429 ITR 121 (MP)(HC)(MP)(HC)
S. 5 : Scope of total income–Interest on NPAs not taxable on accrual basis in the hands of a non-banking institution. [S. 43D, 145, RBI Act, ]S. 45Q]