The Vijay Co.Operative Bank Ltd., Ahmedabad V. The ACIT(OSD), Circle-10, Ahmedabad

ITA 1213/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9182 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 23-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 1213/AHD/2014 (ASSESSMENT YEAR: 2010-11) THE VIJAY CO-OPERATIVE BANK LTD. NOBLES, GROUND FLOOR, NEHRU BRIDGE END, ASHRAM ROAD, AHMEDABAD-380009 V/S ACIT (OSD), CIRCLE-10, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAAJT0217C APPELLANT BY : SHRI VIVEK CHAVDA, AR RESPONDENT BY : SHRI JAMES KURIAN, SR. D.R. ( )/ ORDER DATE OF HEARING : 13 -02-201 7 DATE OF PRONOUNCEMENT : 15 -02-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)- XVI, AHMEDABAD DATED 04.02.2014 PERTAINING TO A.Y. 2010-11. ITA NO. 1213 /AHD/2014 . A.Y. 2010-11 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 5,70 ,535/- AS ACCRUED INTEREST ON NPAS. 3. THE ASSESSEE IS A CO-OPERATIVE BANK ENGAGED IN BANK ING RELATED ACTIVITIES. THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT VIDE ORDER DATED 27.12.2012. THE ONLY ADDITION MADE TO THE RETURNED INCOME WAS ON ACCOUNT OF ACCRUED INTEREST ON NPAS. 4. THIS ISSUE IS NO MORE RES INTEGRA. THE HONBLE JURI SDICTIONAL HIGH COURT HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE IN THE CASE OF SHRI MAHILA SEWA SAHAKARI BANK LTD. IN TAX APPEAL NO. 531 OF 2015 289 CTR 225 WHEREIN THE HONBLE HIGH COURT HAS HELD THAT CO-OPERATIVE BANK IS ALSO A BANKING COMPANY; NOT LIABLE TO PAY T AX ON NPA INTEREST ON ACCRUAL BASIS IN VIEW OF RBI NORMS RELATING TO INCO ME RECOGNITION AND ASSETS CLASSIFICATION. 5. THE HONBLE HIGH COURT FURTHER HELD THAT IT WOULD B E RBI DIRECTIONS WHICH WOULD PREVAIL IN VIEW OF PROVISIONS OF SECTION 45Q OF RBI ACT AND SECTION 145 WOULD HAVE NO ROLE TO PLAY. THEREFORE, IN VIEW OF THE MANDATE OF RBI GUIDELINES, ASSESSEE COULD NOT HAVE RECOGNIZED INCO ME FROM NON- PERFORMING ASSETS ON ACCRUAL BASIS BUT COULD HAVE B OOKED SUCH INCOME ONLY THEN IT WAS ACTUALLY RECEIVED. THEREFORE, INTEREST ON NPAS WOULD NOT BE TAXABLE ON ACCRUAL BASIS IN ASSESSEES HANDS. ITA NO. 1213 /AHD/2014 . A.Y. 2010-11 3 6. RESPECTFULLY FOLLOWING THE AFOREMENTIONED RULING OF THE HONBLE JURISDICTIONAL HIGH COURT, WE SET ASIDE THE FINDING S OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE IMPUGNED ADDITION. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 15 - 02- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 15/02/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD