TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 977
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....e Ld. CIT(A) erred in deleting the disallowances of Rs. 2,91,38,000/- without following alternatively the concept of real income provided in Board Circular No. 201/21/84 dt. 09/10/1984. 4. Any other ground which may be raised with permission of Hon'ble ITAT." 3. Fact in Brief :- The assessee is a Co-operative Bank engaged in the business of banking. The return of income has been filed on 19/09/2011, declaring total income at Rs. nil, showing the current year's loss to be carried forward at Rs. 9,17,22,792, including unabsorbed depreciation of Rs. 32,80,263. The return of income was processed under section 143(1) of the Income Tax Act, 1961 ("the Act") on 11/01/2012 and selected for scrutiny. The assessment was made on total loss of Rs. 2,44,14,471, by making addition of Rs. 2,91,38,000, on account of deduction of excess overdue provision Rs. 41,42,952/- on account of Bad-debt written-off and of Rs. 3,28,70,000, 3,28,70,000/- on account of excess NPA provision. Being aggrieved the assessee preferred appeal before the first appellate authority. 3. Before the learned CIT(A), the assessee made following submissions, which were also reproduced by the learned CIT(A) in its order vide....
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....int of reversal of subvention of Interest receivable credited in P&L account. However Tribunal has made discussion on both the issue simultaneously in para no. 02 to 06 and in para 07 give a conclusion to ground of appeal filed by assessee. On the issue of reversal of NPA interest in the appellate order of Honourable Tribunal Para 07 reads as under : "07. In view of the above details we are convinced that the assessee's claim is bonafide and the amount which has been reversed and debited to profit and loss account for A.Y. 11-12 has already been added in the computation of income because the assessee has already claimed the same in computation of income for A.Y. 2010-11 i.e. year under consideration. In view of these facts, we allow the claim of the assessee and this issue of assessee's appeal is allowed." The conclusion drawn by the Honourable Tribunal in para 07 of the order, there is thin line of difference in conclusion drawn by the Tribunal. The Tribunal has allowed the appeal filed by the assessee in para 07 and rejected the claim of Department on interest subvention in para 19 of the order by giving reference of para 07. Para 19 reads as under: "At the outset, it i....
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....f income, as in the earlier assessment years 2008-09 an amount of Rs. 11,17,33,000/- was debited in the profit and loss account on account of overdue interest provision on NPA account and same was added in the assessment. Thereafter on reversal of excess provision following amounts have been credited in the profit and loss account and same has been claimed as deduction in the computation of income. A.Y. Overdue Interest Provision on NPA accounts added in the return of income Reversal out of the Overdue Interest Provision on NPA Accounts 08-09 11,17,33,000 -- 09-10 -- 3,80,40,000/- 10-11 -- 1,80,60,000 (claimed and allowed by Hon. ITAT, Nagpur Bench) 11-12 2,91,38,000 (Pending Before your Honor) In A.Y. 2010-11 the amount of Rs. 1,80,60,000/- on account of reversal of excess provision for overdue interest on NPA accounts has been allowed by the Hon. ITAT Nagpur Bench in favour of this assessee. Appellant humbly submits that this ground under appeal is squarely covered by Hon. ITAT judgment which was passed on 06.03.2018 in appellant own case. Appeal effect is enclosed herewith for your kind perusal." 4. The learned CIT(A) directed the Assessing Officer to de....
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....er so passed by the learned CIT(A), filed appeal before the Tribunal. He prayed that interest once accrued is irreversible though not collected. 5. Before us, the learned Departmental Representative assailing the impugned order passed by the learned CIT(A) submitted that the the learned CIT(A) was not at all justified in deleting the addition made by the Assessing Officer. He thus prayed that the impugned order be reversed. 6. The learned Counsel for the assessee supported the order passed by the learned CIT(A) and justified the conclusion drawn by the assessee by directing the Assessing Officer to delete the addition made by the Assessing Officer in respect of overdue interest amounting to Rs. 2,91,38,000. In support of his arguments, the learned Counsel relied upon the following case laws:- 1) ACIT v/s Arvind Sahakari Bank Ltd. ITA no.376 & 377/Nag./2010 dated 16/09/2015; 2) CIT v/s Deogiri nagari Sahakari Bank Ltd., Income Tax Appeal no.53 of 2014, judgment dated 22/01/2015 (Bombay High Court at Aurangabad Bench). 7. We have heard the rival contention of both the parties; perused material placed on record and duly considered the facts of the case in the light of settled l....
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.... taxable on accrual basis. In this regard the AO further placed reliance on the judgment of the Hon'ble Apex Court in the case of Southern Technologies Ltd. 320 ITR 577. Upon assessee's appeal, learned CIT (Appeals) referred to the ITAT Vishakhapatnam Bench decision in the case of CIT vs. Durga Urban Cooperative Bank Ltd. (supra) which read as under: "9. The Hon'ble Supreme Court in the case of M/s Southern Technologies Ltd (Supra) dissected the matter into two parts viz.. a) Income Recognition and b) permissible deduction/exclusions under the Income Tax Act. In so far as income recognition is concerned, the Hon 'ble Supreme Court held that Section 145 of the Income Tax Act has no role to play and the Assessing Officer has to follow Reserve Bank of India directions 1998, since by virtue of 45Q of the Reserve Bank of India Act, an overriding effect is given to the directions of Reserve Bank of India vis-a-vis income recognition principles in the Companies Act 1956. In so far as computation of income under the Income Tax Act is concerned, (which involves deduction of permissible deductions and exclusions) the admissibility of such deductions shall be governed by the....
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....ng Officer has to follow the Reserve Bank of India directions 1998, as held by the Hon 'ble Supreme Court. 10.1 Based on the prudential norms, the assessee herein did not admit the interest relatable to NPA advances in its total income. The Hon'ble Delhi High Court in the case of Vasisth Chay Vyapar Ltd (Supra) has held that the intereston NPA assets cannot be said to have accrued to the assessee. In this regard, the following observations of Hon'ble Delhi High Court in the above cited case are relevant: "What to talk of interest, even the principle amount itself had become doubtful to recover. In this scenario it was legitimate move to infer that interest income thereupon has not "accrued". The said decision of the Hon 'ble Delhi High Court is equally applicable to the issue in our hands. Accordingly we do not find any infirmity with the decision of the learned CIT (A) in holding that the interest income relatable on NPA advances did not accrue to the assessee. Accordingly we uphold his order. 11. In the result the appeal of the revenue is dismissed." 11. Considering the above, learned CIT(Appeals) held as under: "On perusal of the above judgment clearly ....