2015 (1) TMI 1218

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.... dates by making additions on various issues. The same is showed below in a tabular form. Tax Appeal Nos. Name of the Assessee/Cooperative Bank. Assessment Year Total income as per computation Deletions of additions which is challenged in the writ petition by the revenue 53 of 2014 M/s Devgiri Nagari Sahakari Bank Ltd., Aurangabad 2009-2010 Rs.9,39,57,223/- Rs.1,06,36,000/- 54 of 2014 M/s Peoples Cooperative Bank Ltd.,Hingoli 2009-2010 Rs.5,15,43,200/- Rs.1,19,77,000/- 57 of 2014 & 58 of 2014 The Nanded District Central Co-operative Bank Ltd., Nanded. 2007-2008 & 2009-2010 Return income: 27,61,76,504/- Total computation of income: Rs. 22,63,61,000/- Rs.25,02,63,000/- 68 of 2014 M/s Vasantdada Nagari Sah. Bank Ltd., Osmanabad 2009-2010 Rs.37,80,596 Rs.1,09,27,419/- 3. The common issue involved in all these appeals relating to the assessment year as mentioned in the aforesaid table about deletion of the additions on account of interest on sticky advances. In all these cases, the Assessing officer, during the assessment proceeding has observed that the provisions of Section 43 (D) of The Income Tax Act cannot be applied to the assessee as it is not a schedule....

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....lar. On the basis of aforesaid submissions, the learned counsel further submits that substantial question of law involved in the above appeals and thus order passed by the Assessing Officer under section 143 (3) of the Income Tax Act, 1961 are required to be confirmed. Learned counsel for the appellants submits that, the Tribunal ought to have allowed the appeal by relying on the judgment in the matter of Southern Technologies Ltd. Vs. Joint Commissioner of Income Tax, Coimbtore Reported in 2010 (2) SCC 548. 7. The learned counsel for respondent/Cooperative banks submit that, the issues involved in the above appeals are no more resintegra in view of the decision rendered by the Hon'ble Supreme Court in the case of Uco Bank, Calcutta Vs. Commissioner of Income Tax, West Bengal reported in (1999) 4 Supreme Court Cases 599.   8. Learned counsel for respondent submits that, learned Tribunal has rightly dismissed the appeals of the revenue by confirming the order passed by the CIT(A). There is no substantial question of law involved in these appeals and thus all the appeals are liable to be dismissed. 9. The Income Tax Appellate Tribunal has referred the case of M/s. Vasisth Cha....

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....he assessee is in accordance with accounting practice. The assessee's method of accounting, transferring the doubtful debt to an interest suspense account and not treating it as profit until actually received, is in accordance with accounting practice up to assessment year 1978-79 the taxability of interest on doubtful debts credited to suspense account will be decided in the light of the Board's earlier Circular dated 6-10-1952, as the said circular was withdrawn only in June,1978. The new procedure under the Circular of 9-10-1984 will be applicable for and from the assessment year, 1979-80. All pending disputes on the issue should be settled in the light of these instructions. Therefore, up to the assessment year 1978-79, the CBDT's Circular of 6-10-1952 would be applicable; while from the assessment year 1979-80, the CBDT's Circular of 9- 10-1984 is made applicable. In the present case, the assessment was made on the basis of the CBDT's Circular on 9- 10-1984, since the assessment pertains to the assessment year 1981-82 to which the Circular of 9-10-1984 is applicable. If, the Board has considered it necessary to lay down a general test for deciding what is a doubtful debt, and ....

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.... interest for the first three years will not be treated as interest on a doubtful loan. But if after three years the payment of interest is not received, from the fourth year onwards it will be treated as interest on a doubtful loan and will be added to the income only when it is actually received. There is no inconsistency or contradiction between the circular so issued and section 145 of the Income Tax Act. In fact, the circular clarifies the way in which these amounts are to be treated under the accounting practice followed by the lender. The circular, therefore, cannot be treated as contrary to section 145 of the Income Tax Act or illegal in any form. It is meant for a uniform administration of law by all the Income-tax authorities in a specific situation and, therefore, validly issued under section 119 of the Income Tax Act. As such, the circular would be binding on the department. The relevant circulars of CBDT cannot be ignored. The question is not whether a circular can override or detract from the provisions of the Act; the question is whether the circular seeks to mitigate the rigour of a particular section for the benefit of the assessee in certain specified circumstance....