TMI Blog2015 (9) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the assessee was justified in not recognising the income as such. Once that was the case, there was no occasion to consider whether the principle of "accrual" would arise or not. Also see Shri Mahila Sewa Sahakari Bank Ltd Versus The Asst. CIT (OSD) [2015 (4) TMI 672 - ITAT AHMEDABAD ] - Decided in favour of assessee - I.T.A. No.872/Ahd/2012 - - - Dated:- 21-8-2015 - SHRI PRAMOD KUMAR AND SHRI KUL BHARAT, JJ. For The Appellant : Shri Shiva Sewak, Sr.DR For The Respondent : Shri Bharat S.Shah, AR ORDER PER SHRI KUL BHARAT, JUDICIAL MEMBER : This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax(Appeals)-XX, Ahmedabad [ CIT(A) in short] dated 15/02/2012 pertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income. Aggrieved by the order of the ld. CIT(A), the Revenue is now in appeal before us. 3. The ld.Sr. DR submitted that the ld. CIT(A) was not justified in deleting the addition. 3.1. On the contrary, ld.counsel for the assessee submitted that the issue is no more res integra has been decided in favour of assessee by the Hon ble High Court of Madras rendered in the case of CIT CIT vs. Coimbatore Lakshmi Inv. Finance Co.Ltd. reported at [2011] 331 ITR 229 (Mad.). 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgement relied upon by the ld.counsel for the assessee. We find that the ld. CIT(A) has decided the issue in paras-5.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.3 Having considered the issue I am inclined to accept the contentions of the AR. The appellant reflected interest in the balance sheet in accordance with the RBI guidelines. However, it did not recognize or realize the interest in the P L account. It has been the practice of the appellant over the years that interest on NPAs is being offered in the year of its realization. In the year under consideration also the appellant credited a sum of ₹ 8,86,007/- to the P L account by way of interest on NPAs received. In the earlier years, this practice of the appellant was accepted by the department. Therefore, I am of the view that impugned addition of interest is unwarranted. It is deleted. This ground of appeal is allowed. 4.1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no question of applying the principle of accrual. The principle of accrual of income comes into play only when the income was recognised. In the present case, the assessee has classified its assets on the basis of the notification issued by the Reserve Bank of India and found that the appellant under the category of nonperforming assets. From such non-performing assets, the assessee had not recognised any income in concealing the notification issued by the RBI. Therefore, the assessee was justified in not recognising the income as such. Once that was the case, there was no occasion to consider whether the principle of accrual would arise or not. In that view of the matter, the Tribunal reversed the finding of the lower authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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