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2018 (3) TMI 1527 - HC - Income TaxAddition made on account of accrued interest on loans treated as “Non Performing Assets” - violation of Section 145 - Held that:- As relying on case of Shri Siddeshwar Co-operative Bank Limited [2016 (6) TMI 1129 - KARNATAKA HIGH COURT] mere nomenclature adopted with reference to the bad loans and advances receivable, would refer to all non-performing assets of any nature, of whatever category placed as a non-performing asset and therefore, the contention of the Revenue that in respect of non-performing assets even though it does not yield any income as the assessee has adopted a mercantile system of accounting, he has to pay tax on the Revenue which has accrued notionally is without any basis. In that view of the matter, the substantial question o law is answered against the Revenue and in favour of the assessee. Co-operative Bank is not required to deduct tax while paying interest under Section 194A. See Bagalkot District Central Co- op. Bank . See CIT v/s Bagalkot District Central Co-op. Bank [2016 (7) TMI 748 - KARNATAKA HIGH COURT] Securities categorized and accounted as “held to maturity” were stock-in-trade and could not be considered as investments and accordingly answered the said question against the Revenue. See Karnataka Vikas Grameen Bank [2015 (12) TMI 1420 - KARNATAKA HIGH COURT]
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