TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 915
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....e heard together and are being disposed of by this common order. 2. First we take up ITA No.41/PN/2015 for A.Y. 2010-11. In grounds of appeal No.1 to 7 the revenue has challenged the order of the CIT(A) in deleting the addition of Rs. 1,58,24,201/- made by the AO on account of accrued interest on NPA u/s.43D of the I.T. Act. 3. Facts of the case, in brief, are that the assessee is a Cooperative Society registered under Cooperative Societies Act with license from RBI to carry on the business of banking. The main activity of the bank is to accept deposits and lend money to the borrowers and also invest in various deposits and securities as allowed by the Maharashtra Cooperative Societies Act and RBI. 4. During the course of assessment proc....
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....mmercial scheduled bank wherein deduction u/s.43D was available but the same could not be extended to non-scheduled cooperative banks as they have been expressly excluded from the purview of sec.43D. Further since the assessee had been following the mercantile system of accounting by crediting entire interest on loans and advances to its income & expenditure accounts, the interest on sticky advances was held to be liable to be considered as income of the assessee. Holding so, the interest shown as receivable on NPAs amounting to Rs. 58,24,201/- was added by the AO to the income of the assessee bank. 6. In appeal the Ld.CIT(A) following various decisions deleted the addition. 7. Aggrieved with such order of the CIT(A) the Revenue is in app....
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....he interest receivable on non-performing assets." 9. Further, the Hon'ble Bombay High Court in the case of CIT Vs. Deogiri Nagari Sahakari Bank Ltd. and others reported in 379 ITR 24 has observed as under (Short notes) : "The assessees were cooperative banks. The Assessing Officer took the view that the provisions of section 43D of the Income Tax Act, 1961, could not be applied to the assessee banks as they were not scheduled banks but cooperative banks, and that considering the provisions of section 43D, nonscheduled co-operative banks were specifically excluded from the special provisions of section 43D regarding interest on sticky advances. He held that the Central Board of Direct Taxes Circular No.F.201/81/84/ITA-II, dated October 9....
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.... amortization of premium on investment. 12. Facts of the case, in brief, are that the AO during the course of assessment proceedings noted that the assessee bank has debited an amount of Rs. 87,048/- towards amortization of premium on securities. On being questioned by the AO it was submitted that it has amortized the amount of such premium paid on Government Securities which are held under the category 'Held to Maturity' only, as per the provisions and rules of RBI, which are mandatory to all banks. However, the Assessing Officer was not convinced with this reply. He observed that the securities acquired by banks with the intention to hold them till maturities are classified as HTM securities. The AFS and HFT securities are in the....
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....ing as under : "6. We have considered the rival arguments made by both the sides. The only issue to be decided is regarding the disallowance of amortization of premium on Govt. securities of Rs. 25,93,929/- by the AO (Rs.35,28,509/- as claimed by the assessee in the grounds). We find the AO disregarding the CBDT Instruction No.17/2008 dated 26-11-2008 disallowed the deduction of amortization of premium by following the decision of the Hon'ble Supreme Court in the case of Southern Technologies Ltd., reported in 320 ITR 577. We find the Ld.CIT(A) upheld the disallowance so made by the AO. We find before the Hon'ble Bombay High Court in the case of HDFC Bank Ltd., (Supra) the following substantial question of law was raised : "c Whether th....
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.... we set-aside the order of the CIT(A) on this issue and direct the AO to delete the disallowance. Ground raised by the assessee is accordingly allowed. 16. Respectfully following the decision of the Coordinate Bench of the Tribunal cited (Supra) and in absence of any contrary material brought to our notice we find no infirmity in the order of the CIT(A) deleting the disallowance. Accordingly, the same is upheld and the grounds raised by the Revenue are dismissed. ITA No.616/PN/2015 (A.Y. 2011-12) : 17. Grounds of appeal No.1 to 5 by the revenue relate to the order of the CIT(A) in deleting the addition of Rs. 52,25,328/- made by the AO on account of accrued interest on NPA u/s.43D of the I.T. Act. 18. After hearing both the sides, we f....