Accounts

Assessee is not liable to pay tax on the non-performing assets which does not yield any income even if assessee has adopted a mercantile system of accounting — as held by KarHC in CIT and Anr v Canfin Homes Ltd — In favour of: The assessee.

Business income — Interest income from Bonds of National Housing Bank and dividend income which was offered to tax by the assessee under the head “income from other sources” should be assessed under the head “Business income” and deduction under s 36(1)(viii) should be allowed.

Decided on: 1 August 2011.