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2015 (2) TMI 1205 - AT - Income TaxAccrued Interest on loans classified as NPAs - whether the interest accrued in NPAs which are doubtful of being recovered should be recognised as the assessed income on accrual or on receipt basis - Held that:- On an appreciation of the material on record, we find that the assessee is in the banking business and governed by RBI Guidelines and Regulations. CIT(A) has rendered a detailed finding deciding the issue in favour of the assessee and deleting the addition on account of interest accrual / receivable on NPAs, by following the decisions in the case of Canfin Homes Ltd. (2011 (8) TMI 178 - KARNATAKA HIGH COURT ) and Shiva Sahakari Bank Niyamitha (2012 (12) TMI 1021 - ITAT BANGALORE) for Assessment Year 2008-09. As also seen that the learned CIT(A), following the decision in the case of Karnavati Co-operative Bank Ltd. (2011 (11) TMI 367 - ITAT AHMEDABAD) held that co-operative banks being governed by RBI Guidelines, the provisions of section 43D of the Act are also applicable to cooperative banks like the assessee and that there is nothing in section 43D of the Act which makes the interest income of the co-operative bank from NPA’s taxable on accrual basis. Before us, Revenue has not been able to controvert these findings of the learned CIT(A) in the impugned order. - Decided against revenue
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