TaxTMI 
TaxTMI 
2026 (2) TMI 1243
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....to a co-operative bank which was brought within the ambit of Section 43B of the Act with effect from A.Y. 2018-19 without appreciating the fact that Punjab and Maharashtra Co-operative bank was included in the Second Schedule to the Reserve Bank of India Act, 1934 and thus comes under definition of Scheduled Bank as per Explanation 4 to Section 43B of the Act c) The Appellant crave, leave to add, alter, amend or modify any or all grounds of appeal on or before the date of hearing." 2. None appeared on behalf of the assessee nor was any adjournment application filed. From the perusal of records, it is noted that the appeal was filed by the Revenue way back in October, 2025 and, thereafter, the matter has been adjourned from time to time and there has been no compliance on the part of the assessee in spite of the notices being issued from time to time, the assessee been informed telephonically on 15-12-2025 and thereafter service of notice were done through e-mail and speed post also. The Ld. DR was also asked to serve notice physically on the assessee at its last known address. However, as per the report of the AO which has been placed on record, the assessee was not fou....
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....t Rs. 87,68,68,284/-. There was however no adjustment to the returned loss and the assessed loss was determined as returned by the assessee at Rs 44,025 vide order passed u/s 143(3) dated 22-12-2019. 5. The assessee thereafter carried the matter in appeal before the Ld.CIT(A). During the appellate proceedings, the assessee submitted that it has opening over draft amount from Punjab and Maharashtra Co-operative Bank to the tune of Rs. 73,11,29,045/- and closing overdraft amount to the tune of Rs. 87,38,16,791/- resulting into net interest on overdraft during the year to the tune of Rs. 14,26,87,746/- and, therefore, the said interest is nothing but towards finance/interest expense of Rs. 14,26,87,746/- minus Rs. 3,00,000/- dividend receipt. It was submitted that there is no additional overdraft facility utilized during the year under consideration. It was submitted that the matter is covered by the decision of the Tribunal in case of assessee‟s associate company in the case of Awas Developers & Constructions Private Limited for the AY. 2016-17 (in ITA No. 551/Mum/2021, dt. 20-07-2022) wherein it was held that interest payment to co-operative bank is not included in the prov....
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....cable to the interest payable to a Cooperative bank by the Finance Act, 2017 w.e.f. 1.4.2018. The word "co-operative bank other than primary agricultural credit society or primary co-operative agricultural and rural development bank was inserted in Clause (d) of sub-section 43B w.e.f. 1.4.2018, meaning thereby, interest payable to a cooperative bank which is not paid on or before the due date prescribed for filing of return of income under section 139(1) of the Act shall be liable to be disallowed under section 43B of the Act only w.e.f. A.Y 2018-19. I notice that the year under consideration is A.Y. 2016-17 For this year, interest payable to a co-operative bank has not been included in the provisions of section 43B of the Act. Accordingly, disallowance made by the Assessing Officer and confirmed by learned CIT(A) is not in accordance with law Accordingly. I set aside the order passed by learned CIT(A) on this issue and direct the Assessing Officer to delete the disallowance of interest payable to M/s Punjab and Maharashtra Co-operative Bank made under section 43B of the Act." 7.2 Facts of the case have ITAT in the above referred decision has held that provisions of sectio....
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....planation 4 to Section 43B of the Act. In this regard, a copy of RBI Gazette Notification dated 10/03/2022 was submitted and the contents thereof read as under: "RESERVE BANK OF INDIA NOTIFICATION Mumbai, the 10th March, 2022, DOR.MON.No. 3764/12.01.000/2021-22.-In exercise of the powers conferred under clause (b) of sub-section (6) of section 42 of the Reserve Bank of India Act, 1934 (hereinafter referred to as "the RBI Act"), the Reserve Bank of India, hereby, directs the exclusion of Punjab and Maharashtra Co-operative Bank Limited from the second schedule of the RBI Act. JAYANT KUMAR DASH, Executive Director [ADVT.-III/4/Exty./179/2022-23]" 9. It was submitted that as evident from the aforesaid notification, Punjab and Maharashtra Co-operative bank was part of second schedule of the RBI Act and it was subsequently removed from that list vide the said notification dated 10/03/2022. It was thus submitted that though Punjab and Maharashtra Co-operative bank was a Co-operative Bank, it was already included in the Second Schedule to the Reserve Bank of India Act, 1934 and hence it was a Scheduled Bank as well and it will thus suffer the necessary consequences in terms of....
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.... 12. For the purposes, it is necessary to examine the definition of the "Scheduled bank" and the "Co-operative bank" which are provided in explanation-4 to section 43B of the Act. It has been provided therein that the term "Scheduled Bank" shall have the meaning assigned to it in the Explanation to clause (iii) of sub section (5) of Section 11 of the Act and the same reads as under: "Explanation - In this clause, "scheduled bank" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934):" 13. The said explanation talks about State Bank of India, a subsidiary bank as so defined, a corresponding new bank or any other bank, being a bank included in the Second schedule to the R....
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....e Act and has decided the matter. Similarly, in case of M/s. Dinshaw Trapinex Builders Pvt. Ltd., vs. ACIT, (ITA(TP) No. 2097/Mum/2016 (AY.2011-12 and others) dated 06-03-2023), we find that the Coordinate Bench relied on the amendment brought in by Finance Act, 2017 w.e.f. 01-04-2018 wherein the Co-operative Banks were specifically included in terms of clause (e) to section 43B of the Act and has held that interest payable to Punjab and Maharashtra Co-operative Bank is not required to be deducted from value of work-in-progress. In view of the same, we find that the said decisions do not support the case of the assessee. 15. Further, we have gone through the decision in the case of Vipin Madanlal Thapar vs. DCIT (in ITA No. 472/Mum/2022 (AY. 2011-12), dt. 30-11-2022) relied upon by the assessee during the course of appellate proceedings before the Ld.CIT(A). Though the Ld.CIT(A) has not considered the said decision while adjudicating the matter, since the said decision has been relied upon by the assessee, we deem it appropriate to examine the relevance thereof in the facts of the present case. In the said case, we find that the relevant facts before the Co-ordinate Bench of the....