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2020 (11) TMI 654 - HC - Income TaxComputation of taxable income - interest accrued on non performing assets - addition made under Section 40(a)(ia) - assessee maintaining mercantile system of accounting - Tribunal held that the provision for non performing assets made by assessee is proper as it is done as per RBI guidelines - whether RBI guidelines cannot override the mandatory provision of Section 145 of the I.T. Act? - HELD THAT:- First substantial question of law has already been answered by a bench of this court vide judgment in The Urban Co-operative Bank Ltd [2014 (10) TMI 740 - KARNATAKA HIGH COURT ] and Special Leave Petition against the aforesaid order has been dismissed by Supreme Court keeping the question of law open. The aforesaid aspect of the matter could not be disputed by the learned counsel for the revenue. For the reasons assigned above the first substantial question of law is answered against the revenue and in favour of the assessee. Deduction for provision for bad and doubtful debt - Benefit under Section 36(1)(viia) - assessee has to first set off the bad debt written off against the provision made under Section 36(1)(viia) of the Act - HELD THAT:- This court in Canfin Homes Ltd. [2011 (8) TMI 178 - KARNATAKA HIGH COURT] after taking note of Section 145 of the Act has held that once a particular asset is shown as non performing asset then the assumption that it is not yielding any revenue. When an asset is not yielding any revenue, the question of showing that revenue and paying tax would not arise. The contentions, which are sought to be raised by learned counsel for the revenue do not arise for consideration in the context of substantial question of law, which has been framed by this court. The concurrent findings have been recorded by the Commissioner of Income Tax (Appeals) as well as tribunal in this regard, which cannot be termed as perverse. - Decided in favour of the assessee.
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