Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 449 - HC - Income TaxInterest accrued on non performing assets - Applicability of sec 43D - whether the assessee was liable to pay tax on interest accrued on loans categorized as non-performing assets (NPA)/sticky loans on receipt basis as claimed by the assessee or on accrual basis as calculated by the revenue? - HELD THAT:- A perusal of the objects of amending the existing provisions of Section 43D vide Finance Bill 2017, reveals that the benefit of the existing provision was available to scheduled bank or a public financial institution etc. With a view to provide level playing field to cooperative banks vis-à-vis scheduled banks and to rationalize the scope of Section 43D, it was proposed to introduce the amendment to Section 43D so as to include co-operative banks other then a primary agricultural credit society or a primary co-operative agricultural and rural development bank. The omission was sought to be corrected by bringing at par the scheduled banks and non-scheduled banks. Thus, it is evident that the amendment was brought in force with a view to cure the omission in Section 43D. Although, the amendment was sought to be made effective w.e.f. 1st April, 2018, but it was liable to be treated as retrospective in nature. In order to arrive at this view, reliance is made on the decision of Hon’ble Supreme Court in Allied Motors’ case [1997 (3) TMI 9 - SUPREME COURT] It serves no purpose that the assessee, which is a non-scheduled bank, should include the NPAs/sticky loans in the relevant assessment year and then claim it as a bad debt in the next assessment year. There is no quarrel with the preposition of law settled by the judgments relied upon by the learned counsel for the appellant, but in view of the decision given in Allied Motors’ [1997 (3) TMI 9 - SUPREME COURT] we are of the opinion that the view taken by the Tribunal that the assessee was required to tax the interest on the sticky loans/NPAs on receipt basis, is liable to be upheld. Appeal dismissed.
|