SIKAR SAHAKARI BHOOMI VIKAS BANK LTD.,SIKAR vs. INCOME TAX OFFICER, SIKAR

Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the action of the Assessing Officer following the decision of the Co-ordinate Bench in assessee’s own case in AY 2011-12 and the relevant finding of the ld. CIT(A) are contained at para 5.2 which is reproduced as under:- “5.2 I have carefully considered the material before me. I find that this issue already decided in appellant own case by the Hon’ble ITAT Jaipur bench in AY 2011-12 vide order dated 29/08/2017 as under:- “We have heard the rival contentions, perused the material available on record. We find that the ld. CIT(A) has given finding on fact that assessee has not written off such NPA and interest thereon as bad debt during the year under consideration this finding on fact is not controverted by the ld. Counsel for the assessee. Ld. Counsel submitted that this is allowable u/s 37 of the Act. In our view, the contentions of the ld. Counsel for the assessee is misplaced the Section 37 relates to the any expenditure not being expenditure of the nature described in Section 30 to 36 since the interest is part of that would be covered u/s 36(1)(vii) of the Act. 2 M/s Sikar Sahakari Bhoomi Vikas Bank Ltd., Sikar Vs. ITO, Sikar Further, the plea of the assessee is that this has been allowed in the earlier years in our view rule of consistency would apply where the assessee has been following the particular accounting policy and the revenue has been accepted the same but the issue of allowability or disallowability of expenses would certainly depend upon the provision of the Act. Therefore, this ground of assessee’s appeal is dismissed.” The facts of the case are totally similar. Therefore following the decision of the Hon’ble ITAT as discuss above. I confirm the addition of Rs. 10,65,000/- as overdue interest. This ground is not allowed.”

During the course of hearing, the ld. AR submitted that the assessee is eligible for deduction u/s 80P(2)(a)(i) of the Act and following the directions of Rajasthan Sahakari Bhoomi Vikas Bank Ltd, the assessee has created the provision for overdue interest of Rs. 10,65,000/- which relates to old loans and advances. It was further submitted that AO has not made any disallowance on account of provision of overdue interest in the earlier years and following the rule of consistency, no disallowance should be made.

Per contra, the ld. DR submitted that the matter is squarely covered by the decision of the Co-ordinate Bench in favour of the Revenue and the same may be followed in the present case.

We have heard the rival contentions and perused the material available on record. We find that the limited issue under consideration relates to disallowance of provision towards overdue interest in respect of loans and advances given by the assessee in the earlier years. We find that the matter has been decided by the Co-ordinate Bench in assessee’s own case in in AY 2011-12 wherein vide order dated 29.08.2017, the said 3 M/s Sikar Sahakari Bhoomi Vikas Bank Ltd., Sikar Vs. ITO, Sikar claim has been denied to the assessee. There being no change in the facts and circumstances of the claim as fairly submitted by both the parties, following decision of Co-ordinate Bench in AY 2011-12, the disallowance so made by the Assessing Officer is hereby confirmed. In the result, ground no. 2 is dismissed.

Regarding other grounds of appeal, no arguments have been advanced by the ld AR, the same are thus dismissed as not pressed.