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2017 (7) TMI 144 - HC - Income TaxClaim for deduction on account of the method for determining an NPA - entitlement to deduction on account of de-recognition of interest accruing upon NPAs applying Rule 6EB of the Income Tax Rules, 1962 - directions issued by the National Housing Bank under Section 30A read with 36 of the National Housing Bank Act, 1987 - Held that:- In the present case, there is no doubt that Section 36 of the NHB Act states that the provisions of Chapter V of the NHB Act would have the effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. However, Section 30A of the NHB Act under which directions are issued by NHB to housing financial institutions, etc. does not contain a non-obstante clause. It is not meant to override Section 43D(b) of the Act in the matter of computation of taxable income. Section 43D of the Act read with Rule 6EB is a complete Code in itself. There is an element of discretion for the rule making authority to follow or not to follow the NHB guidelines as and when they are revised. The purpose of classification of debts as NPA by the NHB and the purpose for non-recognition of income for the purposes of the Act are different. Given the wording of the relevant provisions of the Act and the NHB Act, it is not possible to agree to HUDCO's proposition that with every change in the NHB guidelines there would be a corresponding automatic change in Rule 6EB. As pointed out by the ITAT, the real income principle would have no application as far as Section 43D of the Act. A distinction is required to be drawn between the concept of 'deductions' claimed under the Act which has to satisfy the conditions laid down therein to qualify as such and the prudential norms that the NHB Act may lay down for determining an NPA. The present case is similar to Southern Technologies Ltd. v. CIT (2010 (1) TMI 5 - SUPREME COURT OF INDIA) where the Supreme Court had to deal with the claim for deduction on account of the method for determining - Decided in favour of the Revenue and against the Assessee.
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