2021 (3) TMI 1098

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....crued interest on NPA in the facts and circumstances of the case. 3. The brief facts of the case are that the assessee is a Co-operative Society engaged in the business of banking. The assessee filed return of income declaring a total income of Rs. 8,97,43,602/- which was revised to total income of Rs. 8,03,17,213/-. Under scrutiny notices u/s. 143(2) and 142(1) of the Act issued and in response to which the assessee through its authorized representative submitted various details in support of its return of income. The assessee has shown accrued interest on Non Performing Asset (NPA). In view of the provisions of section 43D the AO asked the assessee to furnish the details of the same. In response to which it was explained that the accru....

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....geable to tax u/s. 43D r.w. Rule 6EA and added to the income of assessee vide this order dated 29-12-2016 passed u/s. 143(3) of the Act. The assessee challenged the order passed by the AO before the CIT(A). We note that the CIT(A) placing reliance on the decision of Hon'ble High Court of Bombay in the case of CIT Vs. Deogiri Nagari Sahakari Bank Ltd. reported in 379 ITR 24 (Bom) held interest accrued on NPAs is not chargeable to tax and directed the AO to delete the addition made. The appellant Revenue before us challenging the order of CIT(A) by raising grounds as discussed above. 4. Shri Deepak Garg, the DR opposed the order of CIT(A) and placed reliance on the order of AO in support of grounds raised therein. 5. Shri Suhas P. B....

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.... Tribunal while deciding the issue in ITA No. 418/PN/2016 for A.Y. 2011-12 order dt. 04.07.2016 has decided the issue in favour of the assessee by observing as under: "7. We find that similar issue as before us arose in ITO Vs. Shankarrao Mohite Patil Sahakari Bank Ltd. in ITA No. 934/PN/2015 and in ITO Vs. Samarth Sahakari Bank Ltd. in ITA No. 615/PN/2015, relating to assessment year 2011-12, order dated 10.02.2016 and Kolhapur Mahila Sahakari Bank Ltd. Vs. ITO in ITA No. 01/PN/2013, relating to assessment year 2009-10, vide order dated 29.01.2014. The Tribunal in turn following the ratio laid down by the Pune Bench of Tribunal in ACIT Vs. Osmanabad Janta Sahakari Bank Ltd. in ITA No. 795/PN/2011, order dated 31.08.2012, held as u....

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....kari Bank Ltd. (supra) the Tribunal has decided the issue in favour of assessee by observing as under: "7. In the case before us, admittedly, assessee has directly taken the interest to the Balance Sheet and it is not routed through the Profit & Loss Account. Moreover, the issue of the taxability of the interest on the sticky losses/advances, is covered in favour of the assessee by the decision of the coordinate Benches in the case of The Durga Cooperative Urban Bank Ltd., Vijayawada (supra) and Karnavati Cooperative Bank Ltd. (supra). We find no reason to interfere with the reasoned order of the Ld. CIT(A) and accordingly the same is confirmed. In the result, the Revenue's ground is dismissed." The above decision has ....