ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE- 1(1), DAVANAGERE vs. M/S. D C C CO-OPERATIVE BANK LIMITED, DAVANAGERE

At the very outset, it was submitted by learned AR of the assessee that one appeal for Assessment Year 2014-15 in is to 1405/Bang/2019 Page 2 of 3 having tax effect below 50 lakhs and therefore, this appeal of the Revenue is not maintainable in view of the low tax effect as per the CBDT’s recent instructions. Accordingly, this appeal of the Revenue is dismissed because of low tax effect because we find that in this year, the addition of only of Rs.78,15,063/- was made by the AO and therefore, tax effect is definitely below Rs.50 lakhs.

In the result, appeal of the Revenue for Assessment Year 2014-15 is dismissed.

Now, we take up the appeal of the Revenue for Assessment Years 2011-12 and 2013-14. In respect of these two appeals, learned DR of the Revenue supported the respective Assessment Order whereas learned AR of the assessee supported the respective order of the CIT(A).

We have considered the rival submissions. We find that in both these years, the only issue involved is regarding the addition made by the AO on account of interest accrued on non-performing assets (NPA) which was deleted by CIT(A). This addition was deleted by learned CIT(A) by following the judgment of Hon’ble Apex Court rendered in the case of UCO Bank Vs. CIT 237 ITR 889 (1999) and of Hon’ble Karnataka High Court rendered in the case of CIT Vs. Canfin Homes Ltd., 347 ITR 0382. It could not be shown by learned DR of the Revenue as to how these judgments are not applicable in the present case and since, the order of CIT(A) is by following these two binding judgments of Hon’ble Apex Court and of Hon’ble Karnataka High Court, we decline to interfere in the order of CIT(A) in both these years. to 1405/Bang/2019 Page 3 of 3 6. In the result, all the three appeals of the Revenue are dismissed.