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2014 (12) TMI 345 - AT - Income TaxDeletion of addition on Non-performing Assets – Applicability of provisions of section 43D - Revenue was of the view that the interest income even in relation to such NPAs was liable to be included in this year’s total income, having regard to the mercantile system of accounting followed by the assessee - Held that:- Following the decision in ACIT vs. The Omerga Janta Sahakari Bank Ltd. [2014 (12) TMI 355 - ITAT PUNE] wherein it was held that so far as the applicability of section 43D of the Act to the assessee is concerned, there is a convergence of opinion between the assessee and the Revenue to the effect that the same is not applicable to the assessee - assessee is a Co-operative Bank carrying on banking business in terms of a license granted by RBI and is not a ‘scheduled bank’ included in second schedule of RBI so as to fall within the scope of section 43D of the Act - 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 of interest on securities purchased – Securities paid to the seller of the securities and corresponds to the period prior to the date of purchase by the assessee bank – Held that:- In CIT vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] has held that the ‘broken period interest’ is allowable as a deduction – there was no justification to uphold the stand of the income-tax authorities. Following the judgement of the Hon’ble Bombay High Court in the case of HDFC Bank Ltd. – the order of the CIT(A) is upheld – Decided in favour of assessee. Claim of employee’s contribution to PF disallowed – Held that:- Following the decision in CIT vs. Ghatge Patil Transports Ltd. [2014 (10) TMI 402 - BOMBAY HIGH COURT] - It has been held that the payment of employees contribution to the Provident Fund was also subject to the provisions of section 43B of the Act and therefore the assessee was to be allowed the benefit of amendment inserted w.e.f. 01.04.2004 by way of the first proviso - even the employees contribution to the Provident Fund paid beyond the respective due dates but before the due date applicable for furnishing of return of income u/s 139(1) of the Act, would not suffer the disallowance u/s 43B – thus, the order of the CIT(A) is set aside and the AO is directed to allow assessee’s claim for deduction representing employees contribution to the Provident Fund deposited before the due date of filing of return prescribed u/s 139(1) - Decided in favour of assessee.
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