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2017 (9) TMI 187 - HC - Income TaxAccrued interest in relation to NPA - amount not brought to the tax by the assessee - applicability of section 145 - assessee is a cooperative bank - ITAT quashed and set aside order of AO - Held that:- Tribunal followed the decision of this Court in case of Principal Commissioner of Income Tax v. Shri Mahila Sewa Sahakari Bank Ltd. [2016 (8) TMI 377 - GUJARAT HIGH COURT] in which the assessee-cooperative bank had not recognized the interest on NPAs as per the section 45Q of the RBI and prudential Norms issued by the RBI in exercise of its statutory powers.. The Court was of the opinion that the bank was bound by such directives of RBI. The Court relied upon a CBDT circular in this respect and held that the interest was not taxable on the basis of accrual. The situation being identical, the issue is covered by the decision of this Court in case of Shri Mahila Sewa Sahakari Bank Ltd. (supra). Revenue however submitted that the Supreme Court in case of Southern Technologies Ltd. v. Joint Commissioner of IncomeTax reported in [2010 (1) TMI 5 - SUPREME COURT OF INDIA] has made a clear distinction with respect to the RBI directions holding that the said directives may apply for the purpose of drawing the accounts of the bank, nevertheless, the same cannot have effect on the computation of the assessee's taxable income. We however notice that the High Court in case of Shri Mahila Sewa Sahakari Bank Ltd. (supra) has considered such a contention and referred to the decision of Supreme Court in case of Southern Technologies Ltd. (supra) before coming to the above noted - Decided against revenue
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