2018 (5) TMI 1433

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....order dated 16.06.2017 as passed by the Income Tax Appellate Tribunal, Bengaluru ['the Tribunal], in ITA. No. 1276/Bang/2016, (relating to the Assessment Year 2010- 2011). The relevant background aspects of the matter are that the respondent-assessee is said to be a Co-operative Society, engaged in banking business. For the assessment year in question, the Assessing Officer proceeded to make addition in respect of interest on non-performing assets (NPAs). However, in appeal by the assessee, the Commissioner of Income Tax (Appeals), Davangere ['the CIT(A)'] deleted such addition by following the decision of this Court in the case of COMMISSIONER OF INCOME TAX AND ANOTHER v. CANFIN HOMES LTD : [2012] 347 ITR 382 (Karnataka). Aggr....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....#39; and 'gains of business or profession' has to be computed either under cash or under mercantile system of accounting and subject to accounting standards notified by the Central Government; and, therefore, in the present case, non-accrual of income on NPAs following mixed system of accounting was not permissible. Having heard learned counsel for the appellants and having perused the material placed on record, we are satisfied that the suggested question of law does not arise in this case, as the matter stands concluded in this Court in view of the decision in Canfin Homes Ltd.'s case (supra). Therein, this Court has specifically held that income from NPA should be assessed on cash basis and not on mercantile basis, despite t....