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2014 (4) TMI 1118 - ITAT PUNEAddition made on account of provision for interest on NPAs - Held that:- Similar issue of allowability of the provision made on account of interest in the case of The Omerga Janta Sahakari Bank Ltd. (2014 (12) TMI 355 - ITAT PUNE) held that the interest on NPA advance cannot be treated as “accrued” to the assessee. In Commissioner of Income tax Versus Vasisth Chay Vyapar Ltd. & others [2010 (11) TMI 88 - Delhi High Court] it was held that what to talk of interest, even the principle amount itself had become doubtful to recover - In this scenario it was legitimate move to infer that interest income thereupon has not “accrued”- thus, there was no infirmity with the decision of the CIT(A) in holding that the interest income relatable on NPA advances did not accrue to the assessee – Decided against revenue. Addition invoking section 40(a)(ia) - failure to deduct the requisite tax at source - Held that:-As contended by assessee that as per the second proviso to section 40(a)(ia) of the Act inserted by Finance Act, 2012 w.e.f. 01.04.2013 no disallowance is to be made u/s 40(a)(ia) of the Act if the assessee is not deemed to be an assessee in default under the first proviso to section 201(1) of the Act. It was submitted that the applicability of the aforesaid proviso be considered retrospectively in the same manner as was considered in the case of the first proviso to section 40(a)(ia) of the Act which was inserted by the Finance Act, 2010 w.e.f. 01.04.2010 but it has been understood as retrospective on the reasoning that it is clarificatory in nature by the Hon’ble Calcutta High Court in the case of CIT vs. Virgin Creations [2011 (11) TMI 348 - CALCUTTA HIGH COURT ]. The Pune Bench of the Tribunal in the case of M/s Gaurimal Mahajan & Sons. (2015 (3) TMI 770 - ITAT PUNE ) considered the aforesaid plea and since the same was being raised for the first time by the assessee before the Tribunal, it was restored back to the Assessing Officer to decide afresh following the decision of the Cochin Bench of the Tribunal in the case of Antony D. Mundackal vs. ACTi [ 2013 (12) TMI 67 - ITAT COCHIN ] . Therefore, respectfully following the decision of the Cochin Bench of the Tribunal cited (Supra) and in the interest of justice, we restore this issue to the file of the Assessing Officer with a direction to examine the above contention of the assessee and decide the issue afresh and in accordance with law.
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