TaxTMI 
TaxTMI 
2018 (4) TMI 1360
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....e Act. 3. The assessee is into banking business. During the course of the scrutiny assessment proceedings, the assessee was asked to submit list of persons to whom loans and advances were given by the bank and interest income has not been officered. Assessee filed a detailed reply stating that an amount of Rs. 19,27,060/- on account of interest of nonperforming assets have not been accounted for in the books of accounts. The A.O. was of the opinion that such interest has to be added to the total income of the assessee and after issuing a show cause notice and considering the reply of the assessee, the A.O. added Rs. 19,27,060/- to the income of the assessee. 4. Assessee carried the matter before the ld. CIT(A) but without any success. 5.....
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....sees would be entitled to the benefit thereof. Merely because by virtue of the provisions of section 43D of the Act, a certain class of assessees is given benefit under the provisions of the Act would not mean that the same would override the circular. 29. On behalf of the appellant it has been contended that section 43D of the Act itself recognizes recognition of taxability of such interest and that when a specific provision in the nature of section 43D of the Act has been made, and entities like the assessee are excluded from the purview thereof, the assessee cannot indirectly claim benefit which would amount to a benefit similar to that under section 43D of the Act. In this regard, it May be noted that the benefit claimed by the asses....
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....rest Suspense Account" would be applicable in its case. The Assessing Officer brushed aside the submission based upon the circular of 1984, on the ground that the same is applicable only to banking companies and not to co-operative banks, on a misconception of law that a co-operative bank is not a banking company. In this regard it may be noted that the expression "banking company" has been defined under section 5(c) of the Banking Regulation Act, 1949 to mean any company which transacts the business of banking in India. Part V of the Banking Regulation Act bears the heading "Application of the Act to Cooperative Societies". Section 56 thereof provides that the provisions of the Act, as in force for the time being, shall apply tg, or in rel....
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....being received on the NPAs. The Commissioner (Appeals) has placed reliance upon the decision of the Supreme Court in the case of Southern Technologies Limited (supra) and held that there is no merit in the contention of the assessee that under commercial accounting, interest on NPAs cannot be charged. On the question of applicability of the CBDT Circular dated 9.10.1984, the Commissioner (Appeals) held that the same would not be applicable for the reason that the provisions of section 43D of the Act are clear and cannot be overridden through delegated legislation viz. circulars and notifications. The Commissioner (Appeals) was further of the opinion that the statutory provisions were brought on the Act much later than the said circular (whi....