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2015 (7) TMI 535 - HC - Income TaxDual method of Accounting - permissibility of one method to arrive at book profits and another method to arrive at taxable income - Whether the appellate authorities were correct in holding that no expenditure can be allotted to the exempted income earned by the assessee when the Assessing Officer had worked out 5% and the appellate Commissioner had worked out at 2.5% despite assessee incurring expenditure for earning such income? - Held that:- In the assessee's case itself [2014 (11) TMI 179 - KARNATAKA HIGH COURT] by an elaborate judgment, this Court considered the said questions of law and by an order dated 1st July 2004 has answered the first and second substantial questions of law in favour of assessee and against the Revenue. Bad debts disallowed u/s 36(1)(vii) - appellate authorities allowed claim - Whether the appellate authorities were correct in holding that excessive claim under proviso to Section 36(1)(viia) of the Act is allowable despite the assessee claiming deduction under Section 36(1)(viia) of the Act which would amount to double deduction? - Held that:- This Court in the assessee's case itself [2014 (11) TMI 179 - KARNATAKA HIGH COURT] had remanded the matter to the Assessing Authority and directed the Assessing Authority to decide the said questions of law in terms of the judgment of the Hon'ble Supreme Court in the case of Catholic Syrian Bank Ltd. v. CIT [2012 (2) TMI 262 - SUPREME COURT OF INDIA] - Decided in favour of revenue for statistical purposes. Unrealized lease rentals on NPA's - whether allowable deduction despite the same not having not accrued and not satisfying Section 43D and RBI Guidelines which did not equate unrealized lease rental of NPA's with that of bad and doubtful debts as claimed by the Assessee? - assessee is one of the leading Scheduled Commercial Banks in the Private Sector - Held that:- There is a communication issued by the Reserve Bank of India to all commercial banks calling upon to follow the "Guidance Note on Accounting for Leases" issued by the ICAI, making it clear that their earlier instructions on treatment of leasing activity on par with loans and advances would continue to remain in force. Therefore, the said communication/guidelines has no bearing in understanding Section 43D of the Act. When the legislature has expressly used the words "income by way of interest" in Section 43D of the Act, if we had to include in that Section the unrealized rentals from equipment leasing activity, it would amount to the Court rewriting the Section, which is impermissible in law. In fact, the authorities have not carefully read the aforesaid statutory provision. It is a case of misreading the provision. A liability under the Income Tax Act cannot be foisted on the basis of analogy. Unless the statute provides, no tax to be levied. Similarly, when the statute expressly provides how the income received is to be taxed and in which year, strictly in accordance with the statutory provision, the tax has to be levied. The language employed in the aforesaid Section is simple. There is no ambiguity. We have to follow the words used in that Section. There is no scope for interpretation at all. Hence, the impugned order passed by the Appellate Authorities cannot be sustained. - Decided in favour of the Revenue.
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