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2015 (3) TMI 886 - ITAT PUNEAccrual of interest - Addition made on account of sticky advances - CIT(A) deleted the addition accepting the plea of the assessee that provisions of section 43D are applicable to the assessee company and to hold decision of the Hon'ble Supreme Court in the case of UCO Bank vs. CIT (1999 (5) TMI 3 - SUPREME Court) is applicable even to the non-scheduled bank like assessee - Held that:- The identical issue has been considered in the case of DCIT, Vijayawada vs. The Durga Cooperative Urban Bank Ltd., Vijayawada [2011 (3) TMI 1552 - ITAT VISAKHAPATNAM] placing its heavy reliance on the decision of Vashist Chay Vyapar Ltd. [2010 (11) TMI 88 - Delhi High Court], in which considered the decision in the case of Southern Technologies Ltd. [2010 (1) TMI 5 - SUPREME COURT OF INDIA] to finally held that the interest income relatable to NPA advances did not accrue to the assessee. In the case before us, admittedly, assessee has directly taken the interest to the Balance Sheet and it is not routed through the Profit & Loss Account. Moreover, the issue of the taxability of the interest on the sticky losses/advances, is covered in favour of the assessee by the decision of the coordinate Benches in the case of The Durga Cooperative Urban Bank Ltd., Vijayawada (supra) and Karnavati Cooperative Bank Ltd. (2011 (11) TMI 367 - ITAT AHMEDABAD )to hold interest on the sticky advances/NPA advances cannot be brought to tax. We find no reason to interfere with the reasoned order of the Ld. CIT(A) and accordingly the same is confirmed. In the result, the Revenue's ground is dismissed. - Decided in favour of assessee. Scope of Section 14A - Disallowance of carried forward losses - whether losses are forming part of total income in view of Sec.14A as the same is result of profits and gains of business or profession? - CIT(A) directed the Assessing Officer to allow the set off of the brought forward losses of the earlier year - Held that:- As relying on CIT vs. Kribhco [2012 (7) TMI 591 - DELHI HIGH COURT ] wherein held Section 14A states that for the purpose of computing total income under Chapter IV, no deduction shall be allowed in respect of expenditure incurred in relation to the income which does not form part of the total income under this Act. It does not state that income which is entitled to deduction under Chapter VIA has to be excluded for the purpose of the said Section. The words "do not form part of the total income under this Act" is significant and important. As noticed above, before allowing deduction under Chapter VIA we have to compute the income and include the same in the total income. In this manner, the income which qualifies for deductions under Sections 80C to 80U has to be first included in the total income of the assessee. It, therefore, becomes part of the income, which is subjected to tax. Thereafter, deduction is to be allowed in accordance with and subject to the fulfillment of the conditions of the respective provisions. This is also subject to Section 80AB and 80A(1) and (2). Chapter VIA does not postulate or state that the incomes which qualify for the said deduction will be excluded and not form part of the total income. They form part of the total income but are allowed as a deduction and reduced - Decided against revenue.
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