Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (12) TMI 355 - 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:- 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. Following the decision in DCIT vs. The Durga Cooperative Urban Bank Ltd. [2011 (3) TMI 1552 - ITAT VISAKHAPATNAM] – the assessee is a cooperative bank and also governed by the Reserve Bank of India - the directions with regard to the prudential norms issued by the Reserve Bank of India are equally applicable to the assessee as it is applicable to the companies registered under the Companies Act - 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.
|