Allowing the appeal the Tribunal held that according to Accounting Standard 9 on “Revenue recognition”, where there was uncertainty regarding realisation of any claim or receipt including interest, it was to be recognised only when there was reasonable certainty as regards its ultimate collection. Since there was uncertainty with regard to the ultimate collection of interest, the assessee had not accounted for it in its books of account for the assessment year 2016-17, though it was following the mercantile system of accounting. The addition of notional interest in the circumstances of the present case, not justified under the accrual concept of accounting, having regard to the mandatory and binding AS-9. Where the principal was doubtful of recovery interest thereon could not be said to have accrued and added to income even under the mercantile system of accounting. Therefore, the charge of notional interest was not sustainable. (AY. 2016-17)