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2015 (1) TMI 1407 - ITAT PANAJIAccrual of income - Addition on account of accrued interest on loans which are classified as "Non-performing Assets" - applicability of provisions of sec. 43D - assessee is a Co-operative Bank carrying on the business of banking - Held that:- Merely because the said amount, accrued was not realized immediately cannot be a ground to avoid payment of tax, but if in his account it is clearly stated though a particular income is due to him but it is not possible to recover the same, then it cannot said to have been accrued and the said amount cannot be brought to tax. Therefore, we reverse the finding of CIT(A) and restore the issue back to the file of Assessing Officer to verify whether the assessee has followed the mercantile system of accounting or not? Secondly, if this amount is accrued to the assessee, but it is not possible to recover the same then it cannot be said to have been accrued and the said amount cannot be brought to tax. The Assessing Officer should verify from the P & L a/c and decide the matter as per law after giving opportunity of hearing to the assessee. Appeal allowed for statistical purposes. TDS u/s 194A - assessee is a cooperative society and has paid interest to its Members - disallowance of interest on term deposit in excess of ₹ 10,000/- u/s. 40(a)(ia) - Held that:- As decided in ACIT vs. The Belgaum District Central Cooperative Bank Ltd., Belgaum [2015 (1) TMI 743 - ITAT PANAJI] terms clause (v) which is general in nature will not apply to the co-op bank. The provisions of Section 194A (1)(viia) is clearly applicable and therefore the ‘assessee’ has to deduct T.D.S. on income credited or paid in respect of deposits except which falls under that provisions. Assessee cooperative bank is liable for TDS u/s. 194. We therefore, dismiss the appeal of the assessee.
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