DEPUTY COMMISSIONER OF INCOME TAX,, PUNE vs. JAI HIND CO-OPERATIVE BANK LTD,, PUNE

The ld. AR submitted that it is a well settled law that where the assessee has not earned any exempt income, no disallowance u/s. 14A is to be made.

On the other hand Shri N. Ashok Babu representing the Department vehemently defended the action of Assessing Officer in making the impugned additions/disallowances. The ld. DR prayed for reversing the findings of Commissioner of Income Tax (Appeals).

Both sides heard. Orders of the authorities below perused. The issue raised in the appeal by the Revenue against deleting of interest of sticky loans has been laid to rest by Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. Deogiri Nagari Sahakari Bank Ltd. (supra). The Hon’ble High Court held that Co-operative Banks are eligible for deduction u/s. 43D in respect of interest on sticky advances/Non Performing Assets. The aforesaid law has been reiterated by the Hon’ble High Court in the case of Principal Commissioner of Income Tax Vs. Solapur District Central Co-op. Bank Ltd. (supra). Thus, in view of law laid down by the Hon’ble Jurisdictional High Court, ground Nos. 1 to 3 of the appeal by the Department are dismissed.

In ground No. 4 of the appeal, the Revenue has assailed deleting of disallowance made u/s. 14A r.w. Rule 8D. It is an undisputed fact that the assessee has not earned any exempt income in the period relevant to the assessment year under appeal. The Hon’ble Delhi High Court in the case of Cheminvest Limited Vs. Commissioner of Income Tax (supra) has held that no disallowance u/s. 14A is to be made in the absence of any

In the result, the appeal of Revenue is dismissed.