TaxTMI 
TaxTMI 
2013 (10) TMI 1291
X X X X Extracts X X X X
X X X X Extracts X X X X
....well as on facts deleting the addition made on account of interest income on Rs. 18,45,181/- amounting to Rs. 64,581/- 2. At the outset of hearing, the Ld. AR pointed out that the issues raised in the ground Nos. 1 & 3 are fully covered in favour of the assessee by the decision of Delhi Bench of the Tribunal in the case of ACIT vs. Rohtak Central Co-op. Bank Ltd., ITA No. 2485/D/2011 (asstt. year 2008-09), order dated 22.7.2011. In support of ground No. 2 the Ld. AR submitted that during the year interest in question was not realized, hence the AO was not justified in making the addition on account of "suspense interest realized" for an amount of Rs. 29,40,274/-. 3. The Ld. DR placed reliance on the assessment order with this contention that the Ld. CIT(A) was not justified in deleting the additions questioned in grounds of the appeal. 4. The relevant facts are that during the course of assessment proceedings the AO noted an addition of Rs. 18,45,181/- in the year under consideration in the account of "suspense individual and Society' of the assessee. The explanation of the assessee in this regard remained that the amount is not income of the assessee as this amount wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n expenses that have to be borne by the respective society. (e) In other words, the amount can be strictly utilized as per the instructions of t eh Registrar of Coop. Societeis (a Govt. Department). Hence this is not an income of the assesee bank. (f) The amounts are otherwise also refundable to the respective account holders just like any other savings or current accounts. This amount is not in the nature of any fees or revenue receipt in the hands of the assesee bank rather this amount is in the nature of deposit like any other savings or current account. (g) The number of such accounts runs into thousands and hence account wise detail is not possible. However, separate ledger of sundry societies is maintained by all the branches of the assesee bank which are produced for your kind perusal. (h) Apart from the proposed societies, a very petty amount is also transferred to this head of account being deposit from the individual account holders. Sometimes, the depositor mentions his wrong bank account number on the pay-in-slip of the bank at the cash counter. The bank while posting the amount to t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rd to show that such contentions of the assessee are incorrect. If the amount deposited in the said account belong to the various depositors, who intended to open the bank account with the assessee, then the said amount cannot attain the character of 'income' in the hands of the assesee unless it is shown that the said amount has become the income of the assesee. If the said amount does not belong to the assessee and the assessee has utilized the same until the said amount is refunded back, no notional interest can be added to that amount as either the assesee has to pay interst if the said amount is credited to the saving account or the amount itself has to be refunded back in case the account is not opened. There is no question of assessing any notional interest on the said amount. Therefore, we find no fault or infirmity in the findings recorded by the Ld. CIT(Appeals) vide which the impugned addition and interest thereon is deleted, we decline to interfere. The appeal filed by the Revenue, being de-void of merit, is being dismissed." 6. We find that the issues raised in the ground Nos. 1 & 3 are fully covered by the above cited decision wherein also the assessee was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riculture and Development) . It was submitted that this amount represents the amount of interest not recovered on seed money. This amount is transferred to profit and loss account as and when recovered. The amount of interest of earlier years realized during the year and credited to profit and loss account is Rs. 1,00,51,715/- under the head suspense interest realized ", which is evident from the profit and loss account. A reference to of master circular of the Reserve Bank of India and guidelines of the State Govt. through registrar of Cooperative Societies were made. As per the said circular, it was submitted that the policy of income recognition should be based on the record of recovery and therefore unrealized income should not be taken to the profit and loss account by State Cooperative Banks and Central Cooperative banks. It was pointed out that the Reserve Bank of India is a regulatory body of all the banks in India and all the circulars have tobe followed by each and every bank. Reserve Bank of India Act is applicable to all the banks including the assessee bank. The decision of Hon'ble Supreme Court in the case of UCO Bank vs, CIT (1999) 237 ITR 889 (SC) was also cited....