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JULY 21, 2011 Section 4 of the Income-tax Act, 1961 - Income - Chargeable as - Assessment year 2006-07 - Where till final settlement of accounts with defaulting borrowers, it was not possible for assessee to bifurcate interim payments made by defaulting borrowers between principal and interest, Assessing Officer was not right in treating entire amount as income [In favour of assessee] The assessee, an undertaking of the Government of Haryana was engaged in the business of financing, merchant banking, leasing, etc. During the course of assessment proceedings, the Assessing Officer, inter alia, made addition of an amount treating the deposits credited under the head 'Current liabilities' in the balance sheet, as income. The Assessing Officer observed that the assessee was maintaining its accounts on cash basis, and in the absence of any bifurcation of the principal amount and the interest, the entire amount was to be treated as having been received on account of interest. The Tribunal deleted the addition observing that unless the accounts were finally settled with the defaulting borrowers, it was difficult to apportion the interim receipts between the principal and the interest. Held that no perversity could be shown by the revenue in the aforesaid findings of the Tribunal warranting interference by this Court. Thus, no substantial question of law arose for consideration of this Court. Yogesh Putney for the Appellant. JUDGMENT Ajay Kumar Mittal, J. - This appeal under section 260A of the Income-tax Act, 1961 (for short "the Act"), has been filed by the Revenue against the order dated October 15, 2010, passed by the Income-tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh (in short "the Tribunal") in I.T.A. No. 179/Chandi/2010, relating to the assessment year 2006-07. 2. The following substantial questions of law have been claimed for determination of this court : "(i) Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in deleting the addition of Rs. 2,06,23,367 made by the Assessing Officer by treating the deposits received by the assessee against settlement pending as income of the assessee…

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