NBFCs Prudential Norms (Reserve Bank) Directions, 1998

NBFCs Prudential Norms (Reserve Bank) Directions, 1998 — the law in short

What the courts have decided on section NBFCs Prudential Norms (Reserve Bank) Directions, 1998, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• CIT v Vasisth Chay Vyapar Ltd Supreme CourtHelps taxpayer
  We are an NBFC. The AO wants interest on a non-performing loan taxed on accrual even though we have not recognised it. Can he do that?
  No. The Supreme Court agreed with the Delhi High Court that where the assessee is a non-banking financial company governed by the Reserve Bank of India Act, interest on an advance classified as non-performing cannot be said to have accrued, having regard to s.45Q of that Act and the prudential norms issued under it. It is an application of the real-income principle: income that has not really arisen is not taxed because the books are kept on the mercantile basis.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.