TaxTMI 
TaxTMI 
2022 (8) TMI 1617
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....) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Years (A.Y) 2011-12 and assessment orders passed u/s. 143 r.w.s. 263 of the Act for the Assessment Year 2013-14. 2. Registry has noted that there is a delay of 40 days in filing appeals by the Revenue before the Tribunal. The appeal is filed before the Tribunal on 26.06.2020 whereas the appeals ought to have been filed on or before 23.05.2020 This period falls under COVID-Pandemic situation, thus following Hon'ble Supreme Court judgment dated 23.3.2020 in suo moto Writ Petition (Civil) No. 3 of 2020, vide Hon'ble Supreme Court has extended time limit for filing appeals w.e.f. 15.3.2020. Thus, there is no delay in filing the above appeals ....
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....r the ld. PCIT held that as the banking license of the assessee is suspended, it cannot claim any loss on realization of nonbanking assets and unabsorbed depreciation. Following the above direction, the Assessing Officer passed assessment order u/s. 143(3) r.w.s. 263 by making disallowance of loss on realization of non-banking assets and unabsorbed depreciation and added as income of Rs. 2,90,00,183/- under the head "income from other sources". 4. The above assessment orders were subject matter of appeals before the Ld. CIT(A). The Ld. CIT (A) after considering the submissions of the assessee held as follows: 5. The appellant has submitted that the bank is under liquidation availing funds for repayment of unpaid deposits as....
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....e staff when bank was in operation as identity and history of advances can be known from such staff only. Bank has also availed insurance from DICGCI and an amount of Rs. 3,65,77,8757- is payable to DICGCI as liability of deposit insurance claim as at 31/03/2014. After the above judgement of Ragupathi Ragavan(Supra) bank has repaid Rs. 3,65,71,875/- to DICGCI and present liability to DICGCI is Rs. Nil. During the year appellant bank has earned interest of Rs. 40,75,681/- and share dividend of Rs. 69,2457- after meeting all expenses including depreciation of Rs. 2,39,7807-there is surplus of Rs. 29,31,478/- however appellant has disallowed aforesaid depreciation of Rs. 2,39,7807- and has claimed deprec....
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....tutory obligation upon banks under liquidation availing insurance claim for deposits and in-fact such liability has been fully paid off to DICGCI and therefore till such obligation all funds realised by bank under liquidation are diverted at source entire income of assessee based on observation in the case of Moti Lai Chhadami Jain v/s CIT 190 ITR 1 (SC) r.w. judgment in the case of Smt. Sarla Dew K. v/s. CIT 222 ITR 211 (Kerala) and associated Power Company Ltd. 218 I T R 195 (SC.) therefore entire interest income and share dividend income is diverted at-source and bank under liquidation has no discretion or authority to apply such funds as it wishes and hence such funds are not available to appellant as income and therefore such income is....
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....to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee. Whereby the obligation income is diverted before it reaches the assessee, it is deductible; but where the income is required to be applied to discharge an obligation [self-imposed and gratuitous] after such income reaches the assessee, the same consequence, in law does not follow. It is the first kind of payment which can truly be excused and not the second. The second payment is merely an obligation to pay another a portion of one's own income, which has been received and is since applied. The first is a case in which the income never reaches the assessee, who even if he were to collect it, does so, ....
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....ts income as it wishes. Hence such funds are not available to the assessee as income and therefore such income is not taxable in the hands of the assessee. Thus Ld. CIT (A) deleted the addition made by the A.O. and allowed the assessee appeals. 5. Aggrieved against the same, the Revenue is in appeal before us and raising the following Grounds of Appeal: 1. The Ld. CIT (A) has erred in law and on facts in holding that the realization of advances and income thereon are diverted at source as the assessee is under statutory obligation to repay DICGCI under DICGCI Act. 2. The Ld. CIT (A) failed to appreciate that in the instant case income has been received by the assessee and the payment to DICGCI is merely an obligation to....