2024 PTD 1009

Case Laws / Head Notes / Paras

Reference--Word accrues or arises--Sticky loan--Accounting system--Interest, maintaining of--Dispute was with regard to method of maintaining accounts by respondent / banks whereby interest against sticky loans were debited to a separate account (mark-up suspense account)--Plea raised by authorities was that same interest should be offered for calculating income tax liability as accrued income of that tax year--Validity--Mere fact that interest becomes receivable to a bank against its sticky loan does not necessarily become its income when banks are maintaining their accounts on mercantile base or even maintaining a hybrid method of accounting-- Such interest becomes subject to impost of tax when it is offered for taxation by bank or lending institution as per mercantile practice-- High Co...