TMI Blog2019 (11) TMI 1603X X X X Extracts X X X X X X X X Extracts X X X X ..... HELD THAT:- As the ld CIT(A) has clearly give a direction to the ld AO to verify the interest income offered by the cooperative society and taxed in the hands of that society same cannot be taxed in the hands of the assessee. We find that there is no grievance caused to the revenue. In the present case the ld AO has already made enquiry with the cooperative societies and it was found that those cooperative societies have offered the above amount to tax in their own hands. Further, it was merely a direction to the ld AO for verification. We do not find any infirmity in the order of the ld CIT(A) and therefore, we dismiss the ground No.2 of the appeal of the ld AO. Addition on account of notional interest - assessee has not shown any interest income from the various loans given to cooperative societies - AO also noted that the assessee also did not clarify that how the same has not been offered to taxation - HELD THAT:- On the non performing assets when the principle itself is doubtful of its recovery the amount of interest as such loans cannot be said to have accrued to the assessee. For accrual of any income, there has to be a corresponding liability on account of payer of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... THAT:- As already held that there is no grievance caused to the revenue as well as to the assessee because if the income is offered in the hands of the cooperative societies they could not have been taxed in the hands of the assessee. In view of this, ground No. 4 of the appeal of the assessee is dismissed. Interest in the hands of the assessee as a notional interest on advances given to the cooperative societies - HELD THAT:- CIT(A) has given a direction to the ld AO that if such advances have been shown as non performing asset then no income can be taxed in the hands of the assessee. This issue has already been decided by us while deciding ground No. 4 of the appeal of the ld Assessing Officer. In view of reasons given by us therein equally applies to this ground of appeal of assessee. Accordingly, we dismiss ground No. 5 of the appeal. - ITA No. 3744/Del/2015, 3488/Del/2015 (Assessment Year: 2008-09) - - - Dated:- 25-11-2019 - SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER Assessee by: Shri R. S. Singhvi, CA And Shri Satyajeet Goyal, CA Revenue by: Smt Aparna Karan, CIT DR ORDER PER PRASHANT MAHARISHI, A. M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act shows that the assessee has debited the provisions for post retirement medical benefits based on scientific and actuarial valuation in accordance with accounting standard 15. According to the assessee the right of an employee to claim medical benefits on his retirement is a known and actual liability arising at the time of services by the assessee. Therefore, same is allowable. The ld AO disallowed the above expenditure holding that same is the contingent liability. The ld CIT(A) deleted the above disallowance relying upon the decision of the Bokaro Power Supply Company Vs. DCIT the coordinate bench in ITA No. 149/Del/2012 dated 24.01.2013 holding that it is based on actuarial valuation and is a definite liability. Therefore, the ld AO is in appeal before us. 6. We have carefully heard the parties on this issue and find that above issue is squarely covered by the decision of the coordinate bench in assessee s own case for AY 2009-10 in ITA No. 309 to 2011/Del/2014 dated 26.03.2018, wherein in para 39 of the order the above claim was allowed and appeal of the revenue on that issue was dismissed. The coordinate bench held that the post retirement medical scheme provision crea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s misconceived. Hence, we dismiss Ground No. 3 of the ld AO. 10. The ground No. 4 is with respect to deletion of the addition of ₹ 30464715/- on account of notional interest. 11. The brief facts of the case shows that assessee has not shown any interest income from the various loans given to cooperative societies. The ld AO also noted that the assessee also did not clarify that how the same has not been offered to taxation. The ld AO noted that the assessee has diverted the interest bearing funds to this cooperative societies for creation of special fund therefore he computed the interest @12% on disbursement made by the assessee to the various cooperative societies. Therefore, he made an addition of ₹ 30464715/- on the total advance of ₹ 253872629/-. The assessee carried issue before ld CIT(A). The ld CIT(A) in para No. 3.8(e) considered the above issue and held that as the assessee has submitted that in view of the RBI Guidelines on non performing assets interest has to be shown on cash basis, so assessee did not recognize any interest on this advance. The ld CIT(A) directed the ld AO to verify the claim of the appellant from the audited accounts that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve Fund created and maintained by it as taxable in the hands of the appellant company only on the basis of observation of Hon'ble ITAT Hyderabad and not on merit. Further, the Ld. CIT (Appeals) has erred in upholding the I entire addition of ₹ 85,00,000/- done by the AO whereas actual interest earned as recorded in the assessment order is only ₹ 49,00,000/-. 3. On the facts and in the circumstances of the case and in Law, the Ld. CIT (Appeals) has erred in upholding the additions made by the AO on notional basis to all Co-operative Societies to whom the appellant company has advanced loan by applying the observation of Hon'ble ITAT Hyderabad which is only with reference to RE-Co- operative Society Siricilla, Hyderabad. 4. On the facts and in the circumstances of the case and in Law, the Ld. CIT (Appeals) has erred in reverting back the issue of the addition of ₹ 6,61,96,753/- to the AO for verification and determination of actual amount of interest earned by the respective Re- Co-operative Societies on the Special Reserve Fund created and maintained by them instead of considering the Additional Evidence furnished by the appellant company to CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, for Assessment Year 2008-09 in ITA No. 280 to 283/Hyd/2015 dated 19.06.2015 the coordinate bench has deleted the addition in the hands of the above cooperative society. In the case of Assessment Year 2008-09 it has not been held by the coordinate bench that interest income is chargeable to tax in the hands of the appellant and not in the hands of the cooperative society. It has simply deleted the addition in the hands of the above cooperative society. Even otherwise looking at the order of the coordinate bench in case of cooperative society the amount of the addition is only ₹ 49 lakhs and not ₹ 85 lakhs. Therefore, the order of the ld AO of estimating the income of ₹ 85 lakhs is incorrect. Further, in assessee s own case the Hon'ble Delhi High Court for Assessment Year 1999-2000 in para 14 and 15 of the order which is reported in 355 ITR 345 where the issue was whether ITAT is right in holding that interest income on special fund taxable in the hands of the assessee and not in the hands of the societies. Further, Hon'ble High Court has further held that petitioner/ appellant was not given any opportunity of hearing before the Hyderabad Bench wher ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
