Penalty in respect of accrued interest on kvp

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2013 Can any one given me caselaw name where penalty was saved when accrued interests on KVP was offered on cash basis.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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02 January 2014 Use Section 145 of the Income Tax Act, which clearly provides that Income chargeable under the head "Income from other sources" shall be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee.

Accordingly the assessee is free to adopt cas basis for interest on KVP and penalty CANNOT be levied.

Querist : Anonymous

Querist : Anonymous (Querist)

22 January 2014 Thank a lot.Can u provide any caselaw on the subject

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