2014 (5) TMI 42

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....company and a State Financial Investment Corporation. The assessee filed its return of income for the AY.1999-2000 on 31-12-1999 admitting a total income of Rs.13,30,63,520/-. The return of income of the assessee was processed u/s.143(1) of the Income Tax Act, 1961 (herein after referred to as 'the Act') on 17-07-2000. Subsequently, re-assessment proceedings were initiated and assessment u/s.143(3) r.w.s. 147 of the Act was completed on 18-03-2002. The case of the assessee was remitted back by the Tribunal to verify whether the business activities of the assessee claimed as long term financing activities would come under explanation (e) of section 36(1)(viii) of the Act. The set aside assessment was completed on 29-12-2008. Again the cas....

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....2000-01 to 2003-04 and 2005-06 and the same was decided in favour of the assessee. The CIT(Appeals) accordingly allowed the appeal of the assessee. The Revenue has come in appeal before the Tribunal. The only ground raised in the appeal is, that the assessee is not a State Financial Corporation and as such is not eligible for the benefit as provided u/s.43D of the Act. 4. Shri T.N.Betgeri, appearing on behalf of the Revenue vehemently opposed the findings of the CIT(Appeals) and prayed for setting aside the impugned order. 5. On the other hand, Shri Saroj Kumar Parida, appearing on behalf of the assessee submitted that similar issue has been adjudicated by the Tribunal on 21-03-2013 in favour of the assessee in ITA Nos.225 to 233 & 20....

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....estment Corporation' u/s.43D of the Act. The assessee is a State Government Company and is providing long term finance for industrial projects. 7. We find that an identical issue had come up before the Tribunal in the case of assessee for AYs.1996-97 to 2003-04, 2006-07 & 2007-08. The Tribunal vide order dated 21-03-2013 in ITA Nos.225 to 233 & 2034/Mds/2011 held as under: "17. Facts apropos are that assessee had advanced a sum of Rs.300 lakhs, as term loan to M/s.NEPC Micon Ltd., who had failed to repay the installments due from 01.04.1997. Assessee had classified the dues as Non-Performing Asset in its books based on Reserve Bank of India guidelines. Assessee had not shown any accrual of interest on such term loan in its accounts. A....

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....come. Per contra, Ld. A.R. supported the order of Ld. CIT(A). 20. We have perused the orders of the lower authorities and heard the rival contentions. There is no doubt that assessee had not charged in its books of accounts any interest on the loans classified by it as non performing assets. It is not a case where assessee had credited such interest and then claimed write off., Assessee might have been following mercantile system of accounting. However, the prudential norms prescribed by RBI, for non banking financial Company under section 45 Q of the RBI Act, made it obligatory for the assessee to classify the loans on which interest was not received for a period exceeding six months, as non-performing assets. Once it was so classified,....