UCO BANK vs COMM.OF INCOME TAX, WEST BENGAL

The Supreme Court held that under Section 263 of the Income-tax Act, the Commissioner of Income-tax can revise an assessment if it is erroneous and prejudicial to the revenue. The Court ruled that interest on loans classified as doubtful and credited to a suspense account cannot be included in the total income for assessment purposes until it is realized. The Court upheld the Income-tax Appellate Tribunal's decision to exclude the amount from the total income, affirming that the method of accounting followed by the bank was appropriate given the circumstances.