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2018 (5) TMI 437 - HC - Income TaxInterest paid to the members without TDS - Co-operative Society engaged in the activities of Co-operative Bank failed to deduct tax at source under the provisions of Section 194A (1) of the Income Tax Act, 1961 from the interest paid to its member over ₹ 10,000/- - Held that:- The said issue is no longer res-integra in view of the CBTD Circular No.19/2015 holding that such Co-operative Banks are not required to deduct tax at source an interest paid on one time deposits by its members, paid or credited on or before 01.06.2015. Also confirmed in CIT vs. Karnataka Vikas Grameena Bank [2017 (6) TMI 1218 - KARNATAKA HIGH COURT]. Taxability of the interest on the bad debts/doubtful debts or NPA (Non- Performing Assets) - interest being actually credited in the Profit and Loss Account of the respondent-Assessee - Held that:- The provisions of Section 43D of the Act itself excludes the taxability of the such interest income. Even without recourse to the concept of non- taxability of interest in such cases under Section 43D of the Act, the Division Bench in the case of CIT vs. Canfin Homes Limited (2011 (8) TMI 178 - KARNATAKA HIGH COURT ) on the basis of the interpretation given to Section 145 providing for “Method of Accounting” in the Act held that such interest income on bad debts/doubtful debt cannot be taxed, unless it is actually received or credited in the Profit and Loss Account of the assessee concerned in that year.
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