Dismissing the appeal of the revenue the Court held that ,though the assessee is following mercantile system of accounting , the interest on non performing assets is not taxable on accrual basis condidering the guidelines of Reserve Bank of India .
PCIT v. Kutch District Co -op Bank Ltd ( 2018) 94 taxmann.com 298 ( Guj) (HC) Editorial: SLP of revenue is dismissed ,CIT v.Jamnagar District Co -Operative Bank Ltd ( 2018) 256 Taxman 212 ( SC)
S. 5 : Scope of total income -Accrual- Mercantile system of accounting -Not liable to be taxed on notional interest on non-performing assets considering the guidelines of Reserve Bank of India [ S. 145 ]