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Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA
Before: Shri P.M.Jagtap & Shri S.S.Viswanethra Ravi
आदेश /O R D E R
PER S.S.Viswanethra Ravi, Judicial Member:-
This appeal by the Revenue against the order dated 26.09.2013 of Commissioner of Income Tax (Appeals)-XXXVI, Kolkata for assessment year 2010- 11.
The Revenue questioned the order of CIT(A) in allowing the claim of assessee made under the head “provision for overdue interest amounting to ₹2,45,89,189/-.” Therefore, the sole issue to be decided in this appeal is as to whether CIT(A) is justified in allowing claim of assessee in the facts and circumstances of the case.
It was submitted by Ld. AR for the assessee that the same issue squarely covered by the order of Co-ordinate Bench of Kolkata in assessee’s own case for A.Y 2009-10 in dated 08.01.2016 which is placed on record. A.Y.2010-11 ACIT Cir-1 Mid. Vs. V.C.Co-Op Bank Ltd. Page 2 4. Brief facts of the case are that assessee is a Co-operative Bank and made provision for overdue interest which is the amount doubtful of recovery and claimed the same as deduction. The Assessing Officer was of the view that the provision for overdue interest and provision for NPA are separate and distinct and such deduction is not includible in computation of income and added the same amount to the total income of assessee. Ld. CIT(A) deleted the addition by relying the judgment of Hon'ble Supreme Court in the case of Southern Technology Ltd. vs. JCIT, Coimbatore reported in 320 ITR 377 (SC). Ld. DR for the Revenue relied on the order of Assessing Officer.
Heard rival submissions and perused the materials available on record. We find that as rightly pointed by Ld. AR that said issue was decided by Co-ordinate Bench vide order dated 08.01.2016 wherein the Bench decided the issue by relying on in the case of ACIT vs. Nadia District Cent. Cooperative Bank Ltd. in for A.Y. 2007-08. We further find that similar issue was raised by Revenue before the Hon'ble jurisdictional High Court of Calcutta in the case of CIT vs. KICM Investment Ltd. and the Hon'ble jurisdictional High Court was pleased to hold that interest on non-performing assets was not includible in the total income of assessee on accrual basis. The same was challenged by Revenue before Hon'ble Supreme Court and the said Special Leave Petition was dismissed on 12.01.2009 in CC No. 29 of 2009 affirming the view of Hon'ble jurisdictional High Court. In view of the same, we are of the view that the claim of assessee towards the creation of provision of overdue interest is admissible deduction and the relevant portion of order in assessee’s own case (supra) is reproduced hereinbelow:- “3.1 At the time of hearing before us, the ld. Counsel for the assessee submitted that this matter is covered by the decision of “A” bench, ITAT, Kolkata dated 1st August, 2014 in ITA No. 1851/Kol/2012 for the assessment year 2007-08 in the case of ACIT-vs- Nadia District Cent Cooperative Bank Ltd. in favour of the assessee, wherein it was held as under:- ‘4. We find that this issue squarely covered by the decision of the Hon'ble Calcutta High Court in the case of CIT Vs. KICM Investment Ltd. in ITA No. 391 of 2007, which was duly affirmed by the Hon'ble Supreme Court, we find no infirmity in the order of CIT. Moreover, it is seen from the grounds raised
by revenue that only grouse of the revenue ITA No.2731/Kol/2013 A.Y.2010
11. ACIT Cir
1. Mid. Vs. V.C.Co-Op Bank Ltd. Page 3 was that there is violation of the provision of Rule 46 of the Rules. We find nothing and once specific query from the bench Ld. Sr. DR could not state what is the violation. In such circumstances, and factually the issue is covered in favour of the assessee by jurisdictional High Court in the case of KICM Investment Ltd., supra, we confirm the order of CIT and this appeal of Revenue is dismissed.”