The Dy. Commr. of Income Tax, Gandhidham Circle, GANDHIDHAM V. M/s. Kutch District Central Co-Operative Bank Ltd., Bhuj

ITA 179/RJT/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9082 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 07-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.179/RJT/2015 ( / ASSESSMENT YEAR : 2010-11) DY.CIT GANDHIDHAM CIRCLE GANDHIDHAM-KUTCH / VS. M/S.KUTCH DISTRICT CENTRAL CO-OPERATIVE BANK LTD. VIJAY NAGAR HOSPITAL ROAD BHUJ-KUTCH ./ ./ PAN/GIR NO. AAAAT 3210 E ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PRAVEEN VERMA, SR.DR ! / RESPONDENT BY : SHRI D.M. RINDANI ON BEHALF OF SHRI VIMAL DESAI, AR ' #$% ! & / DATE OF HEARING 05/04/2017 '( ! & / DATE OF PRONOUNCEMENT 07 / 04 /2017 / O R D E R PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-3, RAJKO T [CIT(A) IN SHORT] DATED 11/02/2015 FOR THE ASSESSMENT YEAR (AY) 2010-11. ITA NO.179 /RJT /2015 DY. CIT VS. M/S.KUTCH DISTRICT CENTRAL CO-OPERA TIVE BANK LTD. ASST.YEAR 2010-11 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE RE AD AS UNDER:- A) THE CIT(A) HAS ERRED IN DELETING THE ADDITION M ADE BY AO ON ACCOUNT OF INTEREST ACCRUED ON NPA DESPITE THE FACT THAT SECTION 43D OF THE I.T.ACT DOES NOT APPLY IN CASE OF THE AS SESSEE. B) WITHOUT PREJUDICE TO THE ABOVE, CIT(A) HAS ERRE D IN NOT APPLYING THE DBDT CIRCULAR NO.F.201/21/84/ITA-II, D ATED 09/10/1984 WHICH REQUIRES INTEREST NOT RECEIVED FO R LESS THAN LAST THREE YEARS, TO BE CONSIDERED AS INTEREST ACCRUED A ND WHICH WAS APPROVED IN THE JUDGMENT OF HONBLE SUPREME COURT I N CASE OF UCO BANK LTD VS. CIT 237 ITR 889. 3. THE LD.AR AT THE OUTSET SUBMITTED THAT THE SOLIT ARY ISSUE RELATES TO TAXABILITY OF INTEREST ON NON-PERFORMING ASSETS. T HE LD.AR POINTED OUT THAT THE SIMILAR ISSUE WAS INVOLVED IN ASSESSEES O WN CASE FOR THE AYS 2007-08 TO 2009-10 WHICH HAS BEEN DECIDED BY CO-ORD INATE BENCH OF THE TRIBUNAL IN FAVOUR OF ASSESSEE IN ITA NO.298/RJT/20 14 & ORS., ORDER DATED 28/04/2016. 4. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW AND THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE REL EVANT TO AYS 2007-08 TO 2009-10 AS POINTED OUT ON BEHALF OF THE ASSESSEE . THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE ITAT-RAJKOT IN A SSESSEES OWN CASE RELEVANT TO AYS 2007-08 TO 2009-10 AS NOTED ABOVE R EADS AS UNDER:- ITA NO.179 /RJT /2015 DY. CIT VS. M/S.KUTCH DISTRICT CENTRAL CO-OPERA TIVE BANK LTD. ASST.YEAR 2010-11 - 3 - 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO PROVISION OF OVERDUE INTEREST ON NPA ACCOUNTS. IT IS AN UNDISPUTED FACT THAT ASSESSEE IS A CO-OPERATIVE BANK AND IS GO VERNED BY THE RESERVE BANK OF INDIA GUIDELINES. WE FIND THAT LD. CIT(A) AFTER CONSIDERING THE CBDT CIRCULAR, PROVISIONS OF ACT AN D VARIOUS DECISIONS CITED IN THE ORDER HAS HELD THAT A.O. WAS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF DEDUCTION ON THE ISSUE OF INTEREST ON OVERDUE LOANS. WE FIND THAT HONBLE BOMBAY HIGH CO URT IN THE CASE OF CIT VS. DEOGIRI NAGAR SAHAKARI BANK LTD. & ORS. (2015) 379 ITR 24 (BOM.) HAS HELD THAT PRUDENTIAL NORMS IS SUED BY RESERVE BANK OF INDIA ARE EQUALLY APPLICABLE TO CO- OPERATIVE BANKS AND THAT INTEREST ON STICKY ADVANCES IS NOT T AXABLE. BEFORE US, REVENUE HAS NOT BROUGHT ON RECORD ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). T HUS, THE GROUND OF REVENUE IS DISMISSED. 5. IN VIEW OF THE IDENTICAL FACTS, WE DECLINE TO IN TERFERE WITH THE ORDER OF THE CIT(A) IN PARITY WITH THE DECISION OF THE IT AT IN ASSESSEES OWN CASE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 07/ 04/ 2017 AT AHMEDABAD. SD/- SD/- ( MAHAVIR PRASAD) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD ; DATED 07/04/2017 ..#, $.,#../ T.C. NAIR, SR. PS ITA NO.179 /RJT /2015 DY. CIT VS. M/S.KUTCH DISTRICT CENTRAL CO-OPERA TIVE BANK LTD. ASST.YEAR 2010-11 - 4 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. - & ' .& / CONCERNED CIT 4. ' .& ( ) / THE CIT(A)-3, RAJKOT 5. 2$34 ,&,# , , /DR,ITAT, RAJKOT 6. 4?@ A% / GUARD FILE. / BY ORDER, 2& ,& //TRUE COPY// / ( DY./ASSTT.REGISTRAR) %&, / ITAT, RAJKOT 1. DATE OF DICTATION .. 5.4.17 (DICTATION-PAD 4-P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 6.4.17 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7.4.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7.4.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER .. 10. DATE OF DESPATCH OF THE ORDER