ITO, WARD, PALAMPUR vs. THE KANGRA CENTRAL COOPERATIVE BANK LIMITED, KANGRA

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ITA 32/CHANDI/2023Status: DisposedITAT Chandigarh31 May 2024AY 2017-18Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)6 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that interest on sticky loans/NPAs should be taxed on a receipt basis, following established judicial precedents and the assessee's consistent accounting practice. The amendment to Section 43D broadening its scope to cooperative societies was noted but the decision was based on existing interpretations and prior rulings.

What were the facts?

The Revenue appealed against the deletion of an addition made on account of interest on Non-Performing Assets (NPAs) for a cooperative bank. The Assessing Officer had added interest income on NPAs on an accrual basis, while the assessee followed a receipt basis as per prudential norms.

What were the issues?

Whether interest income on NPAs for a cooperative bank should be taxed on an accrual basis or a receipt basis, considering prudential norms and the scope of Section 43D.

Which sections of the Income-tax Act were involved?

Section 43D,Section 147,Section 143(3),Section 250,Section 253

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11.

In the result, the present appeal of the Revenue is dismissed.

12.

Now we shall deal with the appeal in since the facts involved in the present case are similar and identical to the facts involved in ITA No. 31/Chd/2023, therefore our findings and conclusions given in ITA No. 31/Chd/2023 shall apply mutatis mutandis to this appeal also.

13.

In the result, both the above appeals filed by the Revenue are dismissed.

Order pronounced in the open Court on 31/05/2024.

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