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2024 (1) TMI 1063 - ITAT CHANDIGARHAccrual of income - interest due on NPA accounts - Urban Co-operative Bank - assessee's not accepted by the AO stating that since the assessee was following mercantile system of accounting, the interest income on NPA need to be included in its total income and has referred to the CBD T Instruction No.17/2008 dated 26.11.2008 issued in the context of Section 145 - HELD THAT:- As decided in Kangra Central Co- operative Bank [2022 (12) TMI 449 - HIMACHAL PRADESH HIGH COURT] although the amendment in section 43D was sought to be made effective w.e.f 1/04/2018 but it was liable to be treated as retrospective in nature and has upheld the view taken by the Tribunal that the assessee was required to tax the interest on the sticky loans/NPAs on receipt basis. We, therefore, find that the matter is squarely covered in favour of the assessee by the decision of the Hon'ble jurisdictional High Court. The amendment whether to be read as retrospective or prospective being a question of law where so decided by the Hon’ble Jurisdictional High Court is binding on all the authorities under its jurisdiction and we see no reason but to respectfully follow the said decision. In the instant case, it is not in dispute that the assessee is a Co-operative Bank and covered under Non Scheduled Bank as per the Banking Regulation Act, 1949 and therefore, the amendment brought in by the Finance Act, 2017 which has been held to be retrospective in nature applies in the case of the assessee. Thus the addition so made by the AO and confirmed by the ld. CIT(A) is hereby set aside. Appeal of assessee allowed.
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