TMI Blog2019 (4) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... s carried in the appeal by the Revenue before the Supreme Court. The Supreme Court in the judgment reported in [2018 (3) TMI 56 - SUPREME COURT OF INDIA] approved the decision of the High Court and dismissed the appeal. Under these circumstances, this question is not entertained. Disallowance u/s 14A r.w.s 8D - HELD THAT:- Sub-section (2) of Section 14A provides that the Assessing Officer shall determine the amount of expenditure incurred in relation to income which is examined for tax if he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. The satisfaction of the Assessing Officer about the correctness of the expenditure offered for disallowance by the assessee therefore is a pre-conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61, since both the Acts operate in different fields and therefore, assessee cannot recognize interest income on NPA and yet not offer it in Profit and Loss account? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in deleting the disallowance of ₹ 71,13,261/- made by AO u/S. 14A r/w Rule 8D after treating the disallowance of ₹ 57,600/- offered by assessee as insufficient on the ground that the AO has not recorded the error in the offer of the assessee before invoking Rule 8D, without any such explicit requirement of law? 3. Question No. (i) arose in following background:- 3.1 Respondent assessee is a Non Banking Finance Company ( NBFC for short). Respondent filed r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As would not be chargeable to tax on mere accrual. The Court referred to and relied upon the decision of the Supreme Court in the case of Southern Technologies Ltd Vs. Joint CIT [2010] 320 ITR 577 (SC). We may note that the decision concerns the assessment year 2010-11 when a co-operative bank was not included under Section 43D of the Act which was inserted by Finance Act, 2017 w.e.f 1.4.2018. 7. In case of CIT Vs. Deogiri Nagari Sahakari Bank Ltd Ors. [2015] 379 ITR 24 (Bom), this Court had expressed a similar view. We may further clarify that in the said case, the Court was concerned with a similar claim raised by the co-operative bank and the Court did record that the assessee was a co-operative bank and not NBFC. However, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia guidelines and which are not in any way in conflict with the Income Tax Act, 1961, the Hon'ble Supreme Court has held in the case of UCO Bank that the interest income would have been brought to the Profit and Loss Account provided it was actually realized, that in case of Nationalized Bank it treated something which is doubtful, and therefore, kept it in a suspense account, was held to be a permissible exercise. In respect of the loans which are advanced, recovery of some of them if considered doubtful, then, even the interest on the loans advanced may not be realized. That is how the amount is not brought to the profit and loss account because they are not likely to be realized by the bank or a NBFC as well. It is permissible theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s question is not entertained. 9. Question No. (ii) pertains to disallowance made by the Assessing Officer under Section 14A of the Act read with Rule 8D. The Tribunal, however, deleted the disallowance on the ground that the Assessing Officer had not recorded the necessary satisfaction for not accepting the disallowance offered by the assessee. As is well known, sub-section (2) of Section 14A provides that the Assessing Officer shall determine the amount of expenditure incurred in relation to income which is examined for tax if he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. The satisfaction of the Assessing Officer about the correctness of the expenditure offered for disallowance by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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