TaxTMI 
TaxTMI 
2022 (5) TMI 1263
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....erforming assets on the facts and circumstances of the case. (iii) Whether the Tribunal was justified in law in not following the binding decision of the Jurisdictional high court in the case of the Canfin Homes Ltd 347 ITR 382 and Siddeshwar Co-Operative Bank Ltd 388 ITR 588 on the facts and circumstances of the case. (iv) Whether the Tribunal was justified in law in adjudicating certain issues which were not before it and not adjudicating certain grounds which were urged and noticed in the body of its order on the facts and circumstances of the case". 3. Hon'ble Court, after hearing the contentions and submissions by both sides observed and directed this Tribunal to decide the appeal afresh. The relevant observations were Hon'ble Court are as under: "6. We have considered the submissions made on both sides and have perused the record. The assessee is a specified entity as provided in sub clause (iv) of clause (a) to Explanation to Section 36(1)(viii) of the Act and development of housing in India is an eligible business by virtue of sub clause c of clause (b) to Explanation to Section 36(1)(viii) of the Act. It is pertinent to note that in view of Section 36(1)(viii) of....
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....cts & circumstances of the case and in law, erred in sustaining the addition of Rs. 1,89,03,179 made by the Assessing Officer towards interest receivable on loans & advances as on 31.3.2010 comprising of interest receivable on loans & advances classified as non-performing assets amounting to Rs. 1,76,91,495 and interest receivable on loans & advances classified as performing assets amounting to Rs.12,11,684." 5. Brief facts of the case are as under: 5.1 The assessee is a cooperative bank and is engaged in the business of banking. It filed its return of income for your under consideration and declared total income of Rs. 2,11,18,930/-. The Ld.AO completed the assessment by determining total income in the hands of assessee at Rs. 4,32,65,905/-. 5.2 Against the additions made by the Ld.AO, the assessee preferred appeal before the Ld.CIT(A) who partly allowed the appeal. 5.3 Aggrieved by order of the Ld.CIT(A), the assessee preferred appeal before this Tribunal. This Tribunal by order dated 09/06/2017 dismissed the appeal of assessee by holding that, assessee is not entitled to deduction under section 36(1)(viii) of the Act. This Tribunal also held that, interest pertaining to no....
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....advances amounting to Rs. 1,89,03,179. 12.1 It is submitted that, the assessee is registered under the Karnataka Cooperative Societies Act 1959 and is therefore governed under the said Act. The Ld.AR submitted that section 57 of the Act, provides that, net profits of cooperative societies shall be determined in accordance with such rules, as may be prescribed, and different rules may be made for different classes of cooperative societies. He further relied on Rule 22 of the Society's Rule 1960, which is framed in accordance with section 57 of the Cooperative Societies Act, which requires that all interest accrued, due but not actually realised, shall be deducted from the gross profits, for the year, before the net profits are arrived at. The Ld.AR submitted that, the assessee therefore has not taken into consideration interest accrued due but not actually realised. The Ld.AR placed reliance on the decision of Hon'ble Karnataka High Court in case of CIT vs Cafin Homes Ltd reported in (2011) 13 taxmann.com 43 in support of his contentions. On the contrary, the Ld.DR relied on orders passed by authorities below. We have perused the submissions advanced were both sides in light of r....
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....andards reads as under:- "4. Accounting policies adopted by an assessee should be such so as to represent a true and fair view of the state of affairs of the business, profession or vocation in the financial statements prepared and presented on the basis of such accounting policies. For this purpose, the major considerations governing the selection and application of accounting policies are prudence, substance over form and materiality." 6. Clause 6 defines 'accrual' for the purpose of paragraphs (1) to (5) in the said accounting standards. 'Accrual' refers to the assumption, that revenues and costs are accrued, that is, recognised as they are earned or incurred (and not as money is received or paid) and recorded in the financial statements of the periods to which they relate. Relying on this definition in the accounting standard, the revenue contends it is immaterial whether any revenue is actually received or not. If it is shown to accrued that is sufficient to charge the said income. In this context it is also necessary to take note of the guidelines dated 28-4-1995 issued by the National Housing Bank with reference to nonperforming asset which is the subje....
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....Such a circular is binding under section 119. Such circulars are meant for ensuring proper administration of the statute and, they are designed to mitigate the rigours of the application of a particular provision of the statute in certain situations by applying a beneficial interpretation of the provision in question. 8. Therefore, it is clear, if an assessee adopts mercantile system of accounting and in his accounts he shows a particular income as accruing, whether that amount is really accrued or not is liable to bring the said income to tax. His accounts should reflect true and correct statement of affairs. Merely because the said amount accrued was not realised immediately cannot be a ground to avoid payment of tax. But, if in his account it is clearly stated though a particular income is due to him but it is not possible to recover the same, then it cannot said to have been accrued and the said amount cannot be brought to tax. In the Instant case we are concerned with a nonperforming asset. As the definition of non-performing asset shows an asset becomes non-performing when it ceases to yield income. Non-performing asset is an asset in respect of which interest has remained....