THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1, VIJAYAPURA vs. M/ S SINDAGI URBAN CO-OPERATIVE BANK LTD, VIJAYAPUR

PDF · subscribers
ITA 360/BANG/2018Status: DisposedITAT Bangalore30 April 2019AY 2008-094 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) was justified in deleting the addition of interest accrued on NPAs. This was because the CIT(A) had followed the binding decisions of the jurisdictional Karnataka High Court on this matter.

What were the facts?

The assessee, a co-operative bank, classified certain loans as Non-Performing Assets (NPA) and did not account for the accrued interest on them. The Assessing Officer (AO) added this accrued interest to the assessee's income, citing a CBDT circular and Section 43D of the Income Tax Act.

What were the issues?

Whether interest accrued on Non-Performing Assets (NPA) is to be offered as income by a co-operative bank, even if not realized.

Which sections of the Income-tax Act were involved?

Section 43D

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “A’’ BENCH : BANGALORE

Before: SHRI B.R BASKARAN & SHRI PAVAN KUMAR GADALE

For Appellant: Dr. Sandeep Goel. Addl. CIT (DR)
For Respondent: Shri Sandeep, C.A
Hearing: 30.04.2019Pronounced: 30.04.2019

O R D E R Per B.R Baskaran, Accountant Member

Both the appeals filed by the revenue on identical grounds relate to assessment years 2008-09 and 2012-13. They are directed against the orders passed by Ld CIT(A), Belgavi. The solitary issue urged in both the appeals is whether the Ld CIT(A) was justified in deleting the addition of interest accrued on Non Performing Assets?

2.

We heard the parties and perused the record. The assessee is a co-operative Bank carrying on banking business. It classified certain assets, being loans and advances, as “Non Performing Assets” (NPA). It did not account for interest income accrued on those NPA. The AO, taking support of CBDT circular No.F.No.201/21/84-ITA-II dated 09.10.1984 and also the provisions of sec.43D of the Act, took the view that the interest accrued on NPA is required to be offered as income. Accordingly he computed interest accrued on NPA and added the same in AY 2008- 09 and 2012-13.

3.

The Ld CIT(A) deleted the same by following the decision rendered by Hon’ble Karnataka High Court in the cases of Canfin Homes Ltd (2011)(201 Taxman 273 and The Bilagi Pattan Sahakari Bank Niyamit, Bilagi (ITA No.100090 of 2015) deleted the addition made by the AO in both the years. The revenue is aggrieved by the decisions so rendered by Ld CIT(A) in both the years.

4.

The Ld D.R supported the orders passed by the AO, while the Ld A.R supported the orders passed by Ld CIT(A).

5.

We notice that the Ld CIT(A) has deleted the additions in both the years by following the decision rendered by Hon’ble jurisdictional Karnataka High Court in the case of Canfin Homes Ltd (supra) and The Bilagi Pattan Sahakari Bank Niyamit (supra). Since the Ld CIT(A) has followed binding decision rendered by jurisdictional High Court, we do not find any reason to interfere with the orders passed by Ld CIT(A) on this issue.

6.

In the result, both the appeals of the revenue are dismissed.

Order pronounced in the Open Court on 30th April, 2019.

More judgments on Section 43D

All 155 judgments and leading authorities on Section 43D →

Recent GST High Court judgments

Search GST case law →