The Deputy Commissioner of Income Tax, Circle-1(3), Ahmedabad V. The Kalupur Commercial Co. Op. Bank Ltd., Ahmedabad

ITA 1864/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2542 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 11-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N R SONI
• Assessee Lawyers: S N SOPARKAR
• Keywords: Gift; Business expenditure; Diversion of income; Question of law; Cost of acquisition; Bad and doubtful debts; Revenue expenditure; Set aside
• Section: 271(1)(c); 143(3); 43D; 145; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.1864/AHD/2017 (ASSESSMENT YEAR : 2014-15) DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(3), AHMEDABAD. VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD., KALUPUR BANK BHAVAN, INCOME TAX CIRCLE, ASHRAM ROAD, AHMEDABAD 380 009. [PAN NO. AAAAT 9360 R] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI N. R. SONI, CIT-D.R. RESPONDENT BY : SHRI S. N. SOPARKAR & PARIN SHAH, A.R. DATE OF HEARING 11.06.2019 DATE OF PRONOUNCEMENT 18 .0 6 . 2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE REVENUE IS DIRECTE D AGAINST THE ORDER DATED 30.06.2017 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS) 10, AHMADABAD ARISING OUT OF THE ORDER DATED 27.12.2016 PASSED BY THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1(3), AHMEDABA D FOR ASSESSMENT YEAR 2014-15 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) WITH THE FOLLOWING GROUND S: (1) THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF BUSINESS PROMOTION ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 2 - MEMBERS GIFT, SCHOLARSHIP EXPENSES AND PAYMENT TO L EGAL HEIRS OF THE MEMBERS AMOUNTING TO RS.31,98,772/-. (2) THAT THE LD.CFF(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF AMORT IZATION OF PREMIUM AMOUNTING TO RS.3,15,81,243/-. (3) THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF INTEREST ACCRUED ON NON PERFORMING ASSETS OF RS.41,18,29,397/-. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER TO THE EXTENT MENTIONED ABOVE SINCE THE ASSESSEE HAS FAILED TO DI SCLOSE HIS TRUE INCOME/BOOK PROFIT. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE .ASSESSING OFFICER BE RES TORED TO THE ABOVE EXTENT. THE APPELLANT CRAVES, TO LEAVE, TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. THE ASSESSEE, A CO-OPERATIVE BANK FILED ITS RETU RN OF INCOME ON 12.09.2014 DECLARING TOTAL INCOME OF RS.80,14,86,73 5/-. UNDER SCRUTINY THROUGH CASS NOTICE U/S 143(3) OF THE ACT DATED 28. 08.2015 WAS ISSUED FOLLOWED BY A FURTHER NOTICE DATED 17.06.2016 U/S 1 42(1) R.W.S. 129 OF THE ACT DUE TO CHANGE OF INCUMBENT. THE ASSESSMENT PROCEEDI NG WAS FINALIZED WITH THE FOLLOWING ADDITIONS: RETURNED INCOME RS.80,14,86,735/- ADDITIONS: 1) DISALLOWANCE OF BUSINESS PROMOTION MEMBERS GIFT, SCHOLARSHIP EXPENSES AND PAYMENT TO LEGAL HEIRS OF THE MEMBERS RS.31,98,772/- 2) AMORTIZATION EXPENSES OF PREMIUM AMOUNTING RS.3,15,81,243/- 3) ADDITION OF AN ACCOUNT OF INTEREST ACCRUED ON NON PERFORMING ASSETS (AS DISCUSSED IN PARA 5) RS.41,18,29,397/- ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 3 - TOTAL RS.1,24,80,96,147/- ASSESSED INCOME U/S 143(3) RS.1,24,80,96,150/- THE SAID ADDITION IN TURN WAS DELETED BY THE LEARNE D CIT(A) IN APPEAL. HENCE, THE REVENUE IS BEFORE US. DURING THE COURSE OF ASSESSMENT PROCEEDING, IT WAS FOUND BY THE LEARNED AO THAT THE ASSESSEE CLAIMED CERTAIN EXPENS ES (GIFT PAID TO MEMBERS, PAYMENT TOWARDS SCHOLARSHIP TO CHILDREN OF MEMBERS, MEMBERS INCENTIVE) ACCORDING TO HIM WHICH DO NOT PERTAIN TO THE BUSINE SS EXPENDITURE. HENCE SHOW-CAUSE WAS ISSUED. THE ASSESSEE FILED A REPLY D ATED 08.11.2016 EXPLAINING THE ISSUE IN DETAIL, IT WAS ALSO PUT ON RECORD THAT ON THE SAME ISSUE THOUGH ADDITION WAS MADE BY THE AUTHORITIES FOR A.Y. 2008- 09 AND 2009-10 THE SAME WAS ULTIMATELY DELETED BY THE HONBLE ITAT, AHMEDAB AD. FURTHER THAT, THE REVENUE ITSELF ALLOWED SUCH CLAIM OF THE ASSESSEE I N THE PREVIOUS YEAR I.E. A.Y. 2013-14. HOWEVER, SUCH PLEA TAKEN BY THE ASSESSEE W AS NOT FOUND SUITABLE BY THE LEARNED AO. HE THUS MADE THE ADDITION OF RS.31, 98,772/- BY NOT CONSIDERING IT AS BUSINESS PROMOTION EXPENSES IN TH E NATURE OF MEMBERS GIFT, SCHOLARSHIP EXPENSES AND ALSO THE PAYMENT TO LEGAL HEIRS OF THE MEMBERS. IN APPEAL, THE SAME WAS DELETED BY THE LEARNED CIT(A) FOLLOWING THE ORDER PASSED IN ASSESSEES OWN CASE FOR A.Y. 2008-09. THE JUDGMENT PASSED BY THE HONBLE ITAT IN APPEAL PREFERRED BY THE REVENUE FOR THE SAID A.Y. 2008-09 WAS ALSO TAKEN INTO CONSIDERATION BY THE LEARNED CI T(A) WHILE DELETING SUCH DISALLOWANCE MADE BY THE LEARNED AO. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE IS COVERED IN ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 4 - FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR A .Y. 2008-09 BY THE JUDGMENT PASSED BY THE CO-ORDINATE BENCH WHICH WAS FURTHER CONFIRMED BY THE JURISDICTIONAL HIGH COURT IN TAX APPEAL NO.596/2017 , COPY WHEREOF WAS ALSO SUBMITTED BEFORE US. THE LEARNED REPRESENTATIVE OF THE REVENUE, HOWEVER, FAILED TO CONTROVERT THE SAID CONTENTION MADE BY TH E LEARNED AR. 4. WE HAVE HEARD THE RESPECTIVE PARTIES, WE HAVE AL SO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. IT APPEARS THAT THE SIMILAR CLAIM OF THE ASSESSEE WAS ALLOWED BY THE LEARNED CIT(A) IN ASSESSEES OWN CASE FOR A.Y. 2008-09, CONFIRMED BY THE HONBLE TRIBUNAL, WHICH WAS TAKEN CARE OF BY THE LEARNED CIT(A) IN HIS OPERATIVE PART OF THE ORDER; THE RELE VANT PORTION WHEREOF IS AS FOLLOWS: 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE APPELLANT AND THE ASSESSMENT ORDER. THE FIRST ISSUE IS REGARDING DISALLOWANCE OF BUSINESS PROMOTION MEMBERS GIFT, SC HOLARSHIP EXPENSES AND PAYMENT TO LEGAL HEIRS OF THE MEMBERS AMOUNTING TO RS.31,98,7762/-. THE SIMILAR ISSUE CAME UP BEFORE T HE HON'BLE ITAT, AHMEDABAD 'C' BENCH IN THE APPELLANTS OWN CASE FOR A.Y. 2008-09. AFTER DISCUSSING THE ISSUE IN DETAIL, THE HON'BLE I TAT HAS HELD AS UNDER:- '5.4 WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIA L AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE MAIN SOURCE OF INCOME OF THE ASSESSEE IS THAT O F RECEIPT OF I INTEREST REALIZED ON THE ADVANCE MADE BY THE BANK A ND OUT OF THE TOTAL ADVANCE OUTSTANDING AT THE END OF THE YEAR AT RS. 735.65 CRORES, ADVANCES TO THE MEMBERS WORKS OUT TO BE RS. 722.36 CRORES WHICH COMPRISES MORE THAN 98% OF TOTAL ADVAN CES. THE PRINCIPAL SOURCE OF RECURRING INCOME OF THE ASSESSE E IS FROM THE MEMBERS AND THEREFORE THE EXPENDITURE FOR 'KEEPING MEMBERS' SUPPORT AND ATTRACTION TOWARDS THE BANK IS WHOLLY A ND EXCLUSIVELY NECESSARY FOR THE PURPOSE OF BUSINESS. THE HON'BLE HIGH COURT OF GUJARAT (FULL BENCH) IN THE CASE OF K ARJAN CO- ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 5 - OPERATIVE COTTON SALES GINNING PRESSING SOCIETY (SU PRA) HAS HELD THAT IT WAS ABSOLUTELY NECESSARY FOR THE ASSES SEE TO MAINTAIN GOODWILL AMONGST ITS MEMBERS AND TO LURE THEM TO CO NTINUE TO DO THEIR BUSINESS WITH THE SOCIETY IF IT GIVE PRESENTS TO THE MEMBERS AND TO COMMEMORATE SILVER JUBILEE CELEBRATIONS, IT COULD NOT BE SAID THAT THE SOCIETY WAS NOT DOING SOMETHING AS A PRUDENT BUSINESS. 5.5 RELIANCE IS ALSO PLACED IN THE CASE OF C1T VS DASCROI TALUKA CO-OP PURCHASE & SALES UNION LTD., 126 ITR 4 13 OF HON'BLE GUJARAT HIGH COURT'S JUDGEMENT WHERE IT WAS HELD THAT THE AMOUNT SPENT BY THE ASSESSEE SOCIETY ON PURCHAS E OF STAINLESS STEEL UTENSILS AND OTHER FOR THE PURPOSE OF TOUR EX PENSES OF MEMBERS WAS CONSIDERED TO BE BUSINESS EXPENDITURE W ITHIN THE MEANING OF SECTION 37 OF THE ACT. 5.6 CONSIDERING TO THE ABOVE STATED FACTS AND CIRC UMSTANCES, THE VOLUME OF EARNING OF THE ASSESSEE BANK ARE MAIN LY MADE THROUGH ITS MEMBERS. THESE EXPENSES ARE INCURRED BY THE ASSESSEE BANK TO ATTRACT THE MEMBERS' CONFIDENCE AN D LOYALTY TOWARDS THE BANK IN THE PREVAILING COMPETITION SO T HAT THE MEMBERS PLACE THEIR DEPOSITS WITH THE ASSESSEE BANK AND CONTINUE TO BORROW FUNDS FROM THE ASSESSEE BANK IN ORDER TO IMPROVE THE PROFIT EARNING AND INCOME OF THE ASSESS EE BANK. WE HAVE ALSO CONSIDERED THAT THE AMOUNT SPENT ON THE A FORESAID EXPENDITURE IS VERY MARGINAL COMPARED TO THE AMOUNT OF INTEREST REALIZED ON THE ADVANCES MADE TO THE MEMBERS BY THE BANK AND AMOUNT OF DEPOSIT MADE BY THE MEMBERS WITH THE BANK . UNDER THESE CIRCUMSTANCES THE AMOUNT SPENT ON SCHOLARSHIP TO THE CHILDREN OF MEMBERS, PAYMENT TO LEGAL HEIRS OF MEMB ERS AND GIFTS TO MEMBERS COULD BE SAID TO BE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS SINCE THE A MOUNT WAS SPENT FOR KEEPING ALIVE ITS GOOD IMAGE AMONGST ITS MEMBERS AND ENSURING THAT GOODWILL AND CONTINUITY OF BUSINESS W ITH THE MEMBERS. IN VIEW OF ABOVE MENTIONED FACTS AND CIRCU MSTANCES, WE FIND THAT THE ASSESSEE HAD INCURRED ABOVE STATED EXPENDITURE FOR PROMOTING THE BUSINESS, EVEN THOUGH THERE IS NO LEGAL OBLIGATION TO INCUR THESE EXPENDITURE BUT THE ASSES SEE HAD INCURRED IT FOR PRESERVING BUSINESS CONNECTION AND GOODWILL OF ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 6 - THE BUSINESS. THEREFORE, IN VIEW OF ABOVE FINDINGS, WE ALLOW THE AFORESAID EXPENDITURE AS BUSINESS EXPENDITURE UNDER SECTION 37 OF THE ACT.' 4.1 SINCE THE ISSUE HAS ALREADY BEEN DECIDED AGAIN ST THE REVENUE BY THE HON'BLE ITAT, AHMEDABAD BENCH, RESPECTFULLY FOL LOWING THE ORDER OF HON'BLE ITAT, THE ADDITION MADE BY THE A.O ON TH IS ACCOUNT IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. WE HAVE ALSO FIND THAT THE SAID ORDER HAS BEEN AFFI RMED BY THE JURISDICTIONAL HIGH COURT IN REVENUES APPEAL NO. 5 96 OF 2017; THE TAX APPEAL PREFERRED BY THE REVENUE WAS FOUND TO BE DEVOID OF MERIT BY THE HONBLE JURISDICTIONAL HIGH COURT, RELEVANT PORTION WHEREOF IS AS FOLLOWS: 3. IT CAN THUS BE SEEN THAT THE TRIBUNAL ACCEPTED THE ASSESSEE'S VERSION THAT THE EXPENDITURE WAS INCURRED FOR THE P URPOSE OF BUSINESS TO MAINTAIN GOODWILL AND CONTINUITY OF BUSINESS BEING PROVIDED BY IMPORTANT MEMBERS. IT WAS POINTED OUT THAT THESE ME MBERS HAD PROVIDED FOR NEARLY 98% OF THE BANK'S BUSINESS AND THE EXPEN DITURE WAS MARGINAL AS COMPARED TO THE INTEREST REALISED ON ADVANCES MA DE TO SUCH MEMBERS BY THE BANK AND THE AMOUNT OF DEPOSITS MADE BY THE MEMBERS WITH THE BANK. THE TRIBUNAL HELD THAT MERELY BECAUSE THERE W AS NO LEGAL OBLIGATION TO INCUR SUCH EXPENDITURE WOULD NOT MEAN THAT THE SAME WAS NOT ALLOWABLE BUSINESS EXPENDITURE IF IT COULD BE P OINTED OUT THAT THE EXPENDITURE INCURRED IN PRESERVING THE BUSINESS CON NECTIONS AND GOODWILL OF BUSINESS EXPENDITURE INCURRED IN PRESER VING THE BUSINESS CONNECTIONS AND GOODWILL OF BUSINESS. 4. NO QUESTION OF LAW ARISES. TAX APPEAL IS ACCORDI NGLY DISMISSED. RESPECTFULLY RELYING UPON THE ORDER PASSED BY THE H ONBLE JURISDICTIONAL HIGH COURT, WE FIND NO INFIRMITY IN THE ORDER PASSE D BY THE FIRST APPELLANT AUTHORITY IN FAVOUR OF THE ASSESSEE. HENCE THE SAME IS HEREBY UPHELD. REVENUES GROUND APPEAL IS FOUND TO BE DEVOID OF ME RIT AND THUS DISMISSED. ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 7 - 5. GROUND NO.2 REVENUE HAS ALSO CHALLENGED THE DELETION OF DISALLO WANCE OF AMORTIZATION OF PREMIUM OF RS.3,15,81,243/- AS M ADE BY THE LEARNED CIT(A). 6. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PRO CEEDING WAS ISSUED A SHOW-CAUSE AS TO WHY AMORTIZATION OF PREMIUM OF RS. 3,15,81,243/- SHOULD NOT BE DISALLOWED. IN REPLY WHEREOF, THE ASSESSEE STATE D THAT THE ASSESSEE FOLLOWED THE GUIDELINES LAID DOWN BY THE RESERVE BANK OF IND IA (RBI) IN THIS RESPECT BEING THE MASTER CIRCULAR DATED 1 ST JULY, 2015. IT WAS FURTHER CLARIFIED THAT AT THE TIME OF ACQUISITION OF INVESTMENTS, CATEGORY OF INVESTMENT IS DECIDED AS TO WHETHER IT IS FOR TRADING OR HELD BY MATURITY. IT W AS ALSO CONTENDED THAT FOR THE ALLOWABILITY OF CLAIM OF PREMIUM PAID ON PURCHASE O F GOVERNMENT SECURITIES WHICH ARE HELD UNDER THE HTM CATEGORY, THE ASSESSEE ON CONSISTENT BASIS FOLLOWING THE SAME METHOD OF ACCOUNTING WHEREIN AMO UNT OF PREMIUM PAID IS DISTRIBUTED TILL THE PERIOD OF MATURITY AND CLAIMED AS REVENUE EXPENDITURE IN RESPECTIVE YEAR. THE JUDGMENT IN THE MATER OF CIT-V S-NEDUNGADI BANK LTD REPORTED IN 130 TAXMAN 93 AND DY.CIT-VS-SURAT NATIO NAL CO-OP BANK LTD PASSED IN ITA NO.2793/AHD/2012 WERE ALSO RELIED UPO N. APART FROM THAT, THE ASSESSEE POINTED OUT THAT SIMILAR ADDITION HAS BEEN DELETED BY THE LEARNED CIT(A) IN ASSESSEES OWN CASE FOR A.Y. 2012-13. HOW EVER, SUCH PLEA TAKEN BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE LEARNE D AO. HE WAS OF THE OPINION THAT THE AMORTIZATION OF PREMIUM PAID TO HT M SECURITIES IS NOT IN THE NATURE OF EXPENDITURE OF LOSS BUT MORE IN THE NATUR E OF CAPITAL AND IS NOT ALLOWABLE U/S 37 OF THE ACT. ULTIMATELY, THE SAID A MOUNT OF RS.3,15,81,243/- WAS ADDED TO THE INCOME OF THE ASSESSEE WHICH WAS I N TURN DELETED BY THE LEARNED CIT(A) IN APPEAL, HENCE THE REVENUE BEFORE US. ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 8 - 7. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE IS ENTIRELY COVERED BY THE ASSESSEES OWN CASE FOR A.Y. 2013-14 WHICH F OLLOWED THE ORDER PASSED IN A.Y. 2012-13. IN FACT, THE ORDER PASSED BY THE L EARNED CIT(A) FOR A.Y. 2012-13 WAS FURTHER AFFIRMED BY THE CO-ORDINATE BEN CH; COPY WHEREOF HAS BEEN ALSO SUBMITTED BY THE LEARNED AR BEFORE US. TH E LEARNED DR, HOWEVER, FAILED TO CONTROVERT THE ARGUMENTS ADVANCED BY THE LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE. 8. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD. IT APPEARS FROM THE RECORDS THAT WHILE DELE TING THE ADDITION MADE BY THE LEARNED AO, THE LEARNED CIT(A) OBSERVED INTER ALIA AS FOLLOWS FOLLOWING THE ORDER PASSED BY HIS PREDECESSOR. RELEVANT PORTION W HEREOF IS AS FOLLOWS: 6. AFTER TAKING INTO CONSIDERATION THE SUBMISSIO N OF THE ASSESSEE, ID. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- '2.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND L EGAL POSITION ON THE ISSUE. THE ALLOWABILITY OF AMORTIZED EXPENSES ON PR EMIUM ON GOVERNMENT SECURITIES HAS BEEN PROVIDED U/S. 36(1)( II) OF THE PROVISIONS HAVE BEEN CLARIFIED AND EXPLAINED BY CBDT, NEW DELH I VIDE INSTRUCTION NO. 17 OF 2008 DATED 26.11.2008. AS PER THIS CLARIF ICATION, INVESTMENTS OF BANKS CLASSIFIED UNDER HTM (HELD TO MATURITY) CA TEGORY NEED NOT BE MARKED TO MARKET AND ARE CARRIED AT ACQUISITION COS T UNLESS THESE ARE MORE THAN THE FACE VALUE, IN WHICH CASE, THE PREMIU M SHOULD BE AMORTIZED OVER THE PERIOD REMAINING TO MATURITY. ON THE BASIS OF THIS INSTRUCTION, DIFFERENT TRIBUNALS, AS MENTIONED ABOV E BY ASSESSEE, HAVE ALLOWED THE AMORTIZED EXPENDITURE. THE AO HAS IGNOR ED THE PROVISIONS OF INSTRUCTION WHICH IS BINDING ON HIM WHILE DISCUS SING THE ISSUE AND DISALLOWING THE EXPENDITURE. SINCE, THE INSTRUCTION S AND CIRCULARS ARE BINDING IN NATURE ON AOS AND DIFFERENT TRIBUNALS HA VE GIVEN DECISIONS ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 9 - AGAINST THE REVENUE, RESPECTFULLY FOLLOWING THE SAM E, GROUND OF APPEAL OF ASSESSEE IS ALLOWED AND ADDITION MADE BY AO IS D ELETED.' SINCE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE B Y PLACING RELIANCE ON VARIOUS DECISIONS OF TRIBUNALS ON THE ISSUE IN VIEW OF CBDT INSTRUCTION DATED 26-11-2008, WE FEEL NO NEED TO INTERFERE WITH THE ORDER PASSED BY HIM AND THE SAME IS HEREBY UPHELD. THIS GROUND OF T HE REVENUE IS DISMISSED.' RESPECTFULLY FOLLOWING THE ORDER OF CIT(A)-4, AHMED ABAD AS MENTIONED ABOVE DT. 03/05/2016 AND MY ORDER VIDE NO.CIT(A)-10 /ACIT.CIR-1 (3)724/15-16 DATED 20/06/2016, AS THE FACTS OF THE APPELLANT'S CASE IN THIS YEAR ARE IDENTICAL TO THE FACTS OF THE CASE DE CIDED BY THE CIT(A)-4, AHMEDABAD, THE ADDITION OF RS. 2,74,57,365/- MADE B Y THE AO ON THIS ISSUE ARE DELETED. THIS GROUND OF APPEAL IS ALLOWED.' 5.1 SINCE THE FACTS REMAIN IDENTICAL AND ISSUE REMA INS THE SAME, RESPECTFULLY FOLLOWING THE ORDER OF CIT(A)-4, AHMED ABAD, AND MY ORDER NO. CIT(A)-10/DCIT.CIR. 1(3)7391/15-16 DATED 28/02/ 2016, THE ADDITION OF RS. 3,15,81,2437- MADE BY THE A.O IS DE LETED. THIS GROUND OF APPEAL IS ALLOWED. WE HAVE ALSO CAREFULLY CONSIDERED THE ORDER PASSED BY THE LEARNED CO- ORDINATE BENCH IN ITA NO.2124/AHD/2016 FOR A.Y. 201 2-13. WHILE DECIDING THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE THE H ONBLE CO-ORDINATE BENCH OBSERVED AS FOLLOWS: 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL ON RECORD CAREFULLY. THE ASSESSEE HAS MADE INVESTMENT IN THE HTM CATEGORY AS PER THE GUIDELINES LAID DOWN BY THE RBI AND CLAIMED AMORTIZATION OF PREMIUM TILL THE PERIOD MATURITY. T HE ASSESSING OFFICER HAS DISALLOWED THE CLAIM FOLLOWING THE SIMILAR ADDI TION MADE BY HIS PREDECESSORS ON THE GROUND THAT THE PREMIUM AMOUNT PAID FOR ACQUIRING THE CAPITAL INVESTMENT CANNOT BE ALLOWED AS DEDUCTI ON EXPENDITURE. THE LD. CIT(A) HAS DELETED THE ADDITION BY FOLLOWING TH E DECISION OF HIS PREDECESSORS. WE HAVE NOTICED THAT AS PER RBI GUIDE LINES DATED 16 TH OCT, 2000, THE INVESTMENT PORTFOLIO OF THE BANK IS REQUIRED TO BE CLASSIFIED UNDER THREE CATEGORIES VIZ.' HELD TO MAT URITY (HTM), HELD FOR ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 10 - TRADING (HFT) AND AVAILABLE FOR SALE (ATS). INVESTM ENT CLASSIFIED UNDER HTM CATEGORY NEEDS TO BE MARKED TO MARKET AND ARE CARRIED AT ACQUISITION COST UNLESS THESE ARE MORE THAN THE FAC E VALUE IN WHICH CASE THE PREMIUM SHOULD BE AMORTIZED OVER THE REMAINING PERIOD. ALLOWABLE OF AMORTIZED EXPENSES ON PREMIUM ON GOVERNMENT SECU RITIES HAS BEEN PROVIDED U/S. 36(1)(II) OF THE ACT AND EXPLAINED BY CBDT VIDE INSTRUCTION NO. 17 OF 2008 DATED 26-11-2008. THE HO N'BLE HIGH COURT OF GUJARAT VIDE (2014) 43 TAXMANN.COM 161 (GUJARAT) IN THE CASE OF CIT, RAJKOT-II VS. RAJKOT DIST. CO-OP. BANK LTD. HE LD THAT INSTRUCTIONS CLEARLY PROVIDE FOR AMORTIZATION OF PREMIUM PAID ON SECURITIES WHEN THE SAME ARE ACQUIRED AT THE RATE HIGHER THAN THE FACE VALUE. SUCH AMORTIZATION WOULD HAVE TO BE FOR THE REMAINING PER IOD OF MATURITY. IN VIEW OF THE ABOVE STATED FACTS AND LEGAL FINDING, W E DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LEARNED CIT(A). TH EREFORE, THE APPEAL OF THE REVENUE IS DISMISSED ON THIS ISSUE. TAKING INTO CONSIDERATION THE JUDGMENT PASSED BY TH E CO-ORDINATE BENCH IN THE IDENTICAL ISSUE, WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT(A) WHICH IN FACT, FOLLOWE D THE RATIO AS LAID DOWN BY THE CO-ORDINATE BENCH. HENCE, WE CONFIRM THE SAME. THE REVENUES APPEAL IS THUS DISMISSED. 9. GROUND NO.3: THE ORDER PASSED BY THE LEARNED CIT(A) IN DELETING THE DISALLOWANCE ON ACCOUNT OF INTEREST ACCRUED ON NON- PERFORMING ASSETS OF RS.41,18,29,397/- WAS UNDER CHALLENGE BEFORE US BY THE REVENUE. 10. DURING THE COURSE OF ASSESSMENT PROCEEDING, UPO N VERIFICATION OF THE AUDITED BALANCE SHEET, IT WAS FOUND THAT THE ASSESS EE HAS NOT CREDITED IN ITS PROFIT AND LOSS ACCOUNT INTEREST ACCRUED ON NON-PER FORMING ASSETS AMOUNTING TO RS.1,20,75,66,875/- WHICH WAS RATHER SHOWN AS OVERD UE INTEREST RESERVE IN THE BALANCE SHEET. A SHOW CAUSE, THEREFORE, WAS ISSUED UPON THE ASSESSEE AS TO WHY ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 11 - INTEREST ACCRUED ON NON-PERFORMING ASSETS SHOULD NO T BE DISALLOWED AND ADDED BACK TO THE INCOME. THE ASSESSEE IN REPLY SUBMITTED THE FOLLOWING: 5.2 TO THIS THE ASSESSEE REPLIED AS FOLLOWS: WE ARE IN RECEIPT OF YOUR ABOVE REFERRED NOTICE AN D IN COMPLIANCE THEREOF WE SUBMIT AS UNDER. AT THE OUTSET WE CLARIFY THAT, PROVISIONS MADE APPL ICABLE AND AMOUNT STATED IN NOTICE BOTH ARE INCORRECT AND THUS SHOW-C AUSE NOTICE ITSELF IS VOID AB INITIO. IN SHOW CAUSE NOTICE, IT IS BEING MENTIONED THAT 'I NTEREST ACCRUED ON NON PERFORMING ASSETS (NPA) NOT CREDITED TO PROFIT & LOSS ACCOUNT U/S 43 OF THE INCOME TAX ACT' WHEREAS SAID PROVISIONS D OES NOT DEAL WITH THE SUBJECT MATTER UNDER REFERENCE NAMELY 'INTEREST ACCRUED ON NON PERFORMING ASSETS (NPA)'. HOWEVER, PROVISIONS OF SE CTION 43D IS FOR THE INTEREST ACCRUED ON NON PERFORMING ASSETS (NPA) . FURTHER, YOU HAVE MENTIONED THAT INTEREST ACCRUED O N NON PERFORMING ASSETS (NPA) IS OF RS.1,20,75,66,875/- BUT IT IS A CUMULATIVE BALANCE OF INTEREST ACCRUED ON NPA ACCOUNTS AND BREAKUP OF THE SAME IS AS UNDER. CUMULATIVE BALANCE AS ON 31/03/2014 RS. 1207 566875 LESS: ADDITIONS MADE IN AY 2013-14 RS. 7957 37478 (DISPUTED IN APPEAL) CURRENT YEAR'S INTEREST ACCRUED ON NPA ACCOUNTS RS. 411829397 SO IF AT ALL YOU PROPOSE TO DISALLOW AND ADD BACK A N AMOUNT OF INTEREST ACCRUED ON NPA, IT SHOULD BE RS. 41,18,29,397 ONLY AND NOT AS PROPOSE IN THE NOTICE. REGARDING NON-APPLICABILITY OF PROVISIONS OF SECTIO N 43D & NON CONSIDERING INTEREST ACCRUED ON NPA ACCOUNT AS INCO ME, YOUR ASSESSEE RESPECTFULLY SUBMITS AS UNDER. 1. YOUR ASSESSEE IS A SCHEDULE BANK AND PROVISION S OF SECTION 43D OF THE IT. ACT. READS AS UNDER. ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 12 - 'SEC. 43D - NOTWITHSTANDING ANYTHING TO THE CONTRAR Y CONTAINED IN ANY OTHER PROVISIONS OF THE ACT, - (A) IN THE CASE OF A PUBLIC FINANCIAL INSTITUTION OR A SCHEDULED BANK OR A STATE FINANCIAL CORPORATION OR A STATE INDUSTRIAL I NVESTMENT CORPORATION, THE INCOME BY WAY OF INTEREST IN RELAT ION TO SUCH CATEGORIES OF BAD OR DOUBTFUL DEBTS AS MAY BE PRESC RIBED HAVING REGARD TO THE GUIDELINES ISSUED BY THE RESERVE BANK OF IND IA IN RELATION TO SUCH DEBTS ; (B) IN THE CASE OF A PUBLIC COMPANY, THE INCOME BY WAY OF INTEREST IN RELATION TO SUCH CATEGORIES OF BAD OR DOUBTFUL DEBT S AS MAY BE PRESCRIBED HAVING REGARD TO THE GUIDELINES ISSUED B Y THE NATIONAL HOUSING BANK IN RELATION TO SUCH DEBTS. (C) SHALL BE CHARGEABLE TO TAX IN THE PREVIOUS YEAR IN WHICH IT IS CREDITED BY THE-PUBLIC FINANCIAL INSTITUTION OR THE SCHEDULED BANK OR THE STATE FINANCIAL CORPORATION OR THE STATE INDUSTRIAL INVES TMENT CORPORATION OR THE PUBLIC COMPANY TO ITS PROFIT AND LOSS ACCOUNT FOR THAT YEAR OR, AS THE CASE MAY BE, IN WHICH IT IS ACTUALLY RECEIVED BY THAT INSTITUTION OR BANK OR CORPORATION OR COMPANY, WHICHEVER IS EARLIE R. EXPLANATION - FOR THE PURPOSES OF TINS SECTION' IT IS CLARIFIED THAT SECTION 43D PROVIDES THAT IN, CASE OF A PUBLIC FINANCIAL INSTITUTION OR A SCHEDULED BANK OR STATE FINANCIAL CORPORATION, INCOME BY WAY OF INTEREST ON SUCH CATEGORIES OF BAD & DOUBTFUL DEBT AS MAY BE PRESCRIBED, HAVING REGARD TO GUIDELINES ISSU ED BY RBI IN RELATION TO SUCH DEBT I.E. IN OTHER WORDS INTEREST ON (N.P.A) NON PERFORMING ASSET CLASSIFIED AS SUCH ON THE BASIS OF GUIDELINES PRESCRIBED BY THE RBI SHALL BE CHARGEABLE TO TAX (A) IN THE PREVIOUS YEAR IN WHICH IT IS CREDITED TO ITS PROFIT AND LOSS ACCOUNT BY THE SAID INSTITUTION OR BANK OR CORPORAT ION OR (B)IN THE PREVIOUS YEAR IN WHICH IT IS ACTUALLY REC EIVED BY THE INSTITUTION OR BANK, WHICHEVER IS EARLIER ON FACTS OF THE CASE, ASSESSEE BANK HAS NEITHER CRE DITED ANY SUCH INTEREST NOR ANY PART OF INTEREST WHICH IS ACTUALLY RECEIVED AND NOT ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 13 - SHOWN AS INCOME AND THEREFORE PROVISION OF SECTION 4 3D ARE NOT APPLICABLE AS MADE APPLICABLE BY YOUR SHOW CAUSE NO TICE. MOREOVER, A COPY OF THE GAZETTE OF INDIA DULY SHOWI NG YOUR ASSESSES BANK AS SCHEDULED BANK IS APPENDED. (ANNEXURE A) KINDLY REFER TO THE ASSESSMENT ORDER FOR THE IMMEDI ATE PREVIOUS YEAR I.E. AY 2013- 14, WHERE IN FOR THE FIRST TIME LEARNED AS SESSING OFFICER HAS MADE ADDITIONS OF RS.79,57,37,478 AND THE MATTER IS PENDING BEFORE THE CIT (A), AHMEDABAD AND SAME IS PARTLY HEARD. EVEN FOR MAKING SAID ADDITION, THE LEARNED ASSESSIN G OFFICER HEAVILY RELIED UPON THE INCORRECT OBSERVATION THAT THE ASSE SSEE IS NOT A 'SCHEDULE BANK'. THE LEARNED ASSESSING OFFICER FURT HER AGREED THAT HAD IT BEEN SCHEDULE BANK IT WOULD HAVE BEEN OTHERWISE NOW FOR THE YEAR UNDER REFERENCE YOUR GOOD SELF HAVE CATEGORICAL INQ UIRED ABOUT THE STATUS OF THE ASSESSEE BANK (WHICH YOUR PREDECESSOR HAD, NOT) AND YOUR ASSESSEE HAS PRODUCED A COPY OF GAZETTE PUBLISHED B Y THE AUTHORITY RECOGNIZING ASSESSEE BANK AS A 'SCHEDULE BANK' SINC E SEPTEMBER 1, 1988. IN VIEW OF THE CLEAR PROVISIONS OF SEC. 43D OF THE I. T. ACT, 1967 NS CLARIFIED, HERE IN ABOVE, IT IS HUMBLY REQUESTED NO T TO MAKE SUCH ADDITION AS ALLEGED AND SAVE YOUR ASSESSEE FROM FAC ING UNCALLED FOR PRESSURE OF PAPER DEMAND. KINDLY REFER TO 'INCOME\RECOGNITION POLICY CONTAINS IN MASTER CIRCULAR ISSUED BY THE RBI DATED JULY 1, 2015 RELATING TO IN COME RECOGNITION, ASSET CLASSIFICATION PROVISIONING AND OTHER RELATED MATTERS- UCB ON PAGE 16A COPY OF THE SAID CIRCULAR IS APPENDED - AN NEXURE III (ANNEXURE B) THEREIN IT HAS BEEN CATEGORICALLY STATED THAT 'INCO ME FROM NON- PERFORMING ASSETS (NPA) IS NOT RECOGNIZED ON ACCRUA L BASIS BUT IS BOOKED AS INCOME ONLY WHEN IT IS ACTUALLY RECEIVED. THEREFORE BANKS SHOULD NOT TAKE INCOME ACCOUNT INTEREST ON NON PERF ORMING ASSETS ON ACCRUAL BASIS. PARA 4.5 INTEREST APPLICATION ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 14 - 4.5.1 IN CASE OF NPAS WHERE INTEREST HAS NOT BEEN RECEIVED FOR 90 DAYS OR MORE, AS A PRUDENTIAL NORM, THERE IS NO USE IN D EBITING THE SAID ACCOUNT BY INTEREST ACCRUED IN SUBSEQUENT QUARTERS AND TAKING THIS ACCRUED INTEREST AMOUNT AS INCOME OF THE BANK AS TH E SAID INTEREST IS NOT BEING RECEIVED. IT IS SIMULTANEOUSLY DESIRABLE TO S HOW SUCH ACCRUED INTEREST SEPARATELY OR PARK IN A SEPARATE ACCOUNT S O THAT INTEREST RECEIVABLE ON SUCH NPA ACCOUNT IS COMPUTED AND SHOW N AS SUCH, THOUGH NOT ACCOUNTED AS INCOME OF THE BANK FOR THE PERIOD. 4.5.3 WITH A VIEW TO ENSURING UNIFORMITY IN ACCOUN TING THE ACCRUED INTEREST IN RESPECT OF BOTH THE PERFORMING AND NON- PERFORMING ASSETS, THE FOLLOWING GUIDELINES MAY BE ADOPTED NOTWITHSTAN DING THE EXISTING PROVISIONS IN THE RESPECTIVE STATE CO. OPERATIVE SO CIETIES ACT. : (I) INTEREST ACCRUED IN RESPECT OF NON-PERFORMING ADVAN CES SHOULD NOT BE DEBITED TO BORROWAL ACCOUNTS BUT SHOWN SEPAR ATELY UNDER 'INTEREST RECEIVABLE ACCOUNT' ON THE 'PROPERTY AND ASSETS' SIDE OF THE BALANCE SHEET AND CORRESPONDING AMOUNT SHOWN UNDER 'OVERDUE INTEREST RESERVE ACCOUNT' ON THE 'CAPITAL AND LIABILITIES' SIDE OF THE BALANCE SHEET. THUS, AS IT IS MANDATORY REQUIRED ASSESSEE HAS PREPARED, ITS ACCOUNTS EXACTL Y AS PER SAID GUIDELINES. MOREOVER, IF AN ASSESSEE ADOPTS MERCANTILE SYSTEM O F ACCOUNTING AND IN HIS ACCOUNTS HE SHOWS A PARTICULAR INCOME AS ACCRUI NG, WHETHER THAT AMOUNT IS REALLY ACCRUED OR NOT IS LIABLE TO BRING THE SAID INCOME TO TAX. HIS ACCOUNTS SHOULD REFLECT TRUE AND CORRECT STATEM ENT OF AFFAIRS. MERELY BECAUSE THE SAID AMOUNT; ACCRUED WAS NOT REALIZED, CANNOT BE A GROUND TO AVOID PAYMENT OF TAX. BUT, IF IN HIS ACCOUNT IT IS CLEARLY STATED THAT THOUGH A PARTICULAR INCOME IS DUE TO HIM BUT IS NOT POSSIBLE TO RECOVER THE SAME, THEN IT CANNOT BE SAID TO HAVE BEEN ACCRU ED AND THE SAID AMOUNT CANNOT BE BROUGHT TO TAX. IN THE INSTANT CAS E WE ARE CONCERNED WITH A NON PERFORMING ASSET. AS THE DEFIN ITION OF NON PERFORMING ASSET SHOWS AN ASSET (LOAN OR ADVANCE) B ECOMES NON PERFORMING WHEN IT CEASES TO YIELD INCOME, NON PER FORMING ASSET IS AN ASSET IN RESPECT OF WHICH INTEREST HAS REMAINED UNPAID AND HAS BECOME PAST DUE. ONCE A PARTICULAR ASSET IS SHOWN T O BE A NON PERFORMING ASSET THEN THE ASSUMPTION IS IT IS NOT Y IELDING ANY REVENUE AND EVEN PRINCIPAL REPAYMENT IS DOUBTFUL. WHEN IT I S NOT YIELDING ANY ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 15 - REVENUE, THE QUESTION OF SHOWING THAT REVENUE AND P AVING TAX WOULD NOT ARISE. 3. YOUR ASSESSEE RELY UPON THE FOLLOWING DECISION - (ANNEXURE C) THE SINDAGI URBAN CO. OP. BANK VS. DEPARTMENT OF IN COME TAX ITAT, BANGLORE COMMISSIONER OF INCOME TAX VS. SHRI SIDDESHWAR C O. OPERATIVE BANK LTD. - KARNATAKA HIGH COURT COMMISSIONER OF INCOME TAX VS. CAN/IN HOMES LTD. - KARNATAKA HIGH COURT RELEVANT DOCUMENTS REGARDING TO AFORESAID MATTER IS BEING APPENDED HEREWITH.' HOWEVER, SUCH SUBMISSION OF THE ASSESSEE WAS NOT AC CEPTED BY THE LEARNED AO AND HE WAS OF THE VIEW THAT THE CIRCULAR ISSUED BY THE RBI WHICH HAS BEEN RELIED UPON BY THE ASSESSEE WAS OF NO IMPA CT ON THE COMPUTATION OF TAXABLE INCOME UNDER THE INCOME TAX ACT. THE DIRECT IONS GIVEN UNDER SUCH CIRCULAR CANNOT OVERRULE THE PERMISSIBLE DEDUCTION OR OTHER EXCLUSION UNDER THE INCOME TAX ACT. HE FURTHER ADDED THE FOLLOWING: 5.7 FURTHER, ACCORDING TO SECTION 145, WITH EFFEC T FROM 1.4.1997, INCOME OF THE ASSESSEE SHALL BE COMPUTED EITHER ON CASH OR ON MERCANTILE SYSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. IT CANNOT BE ON MIXED SYSTEM OF ACCOUNTING. SUB SECTIO N (1) OF SECTION 145 CONTAINS THE WORD 'SHALL' WHICH SUGGEST THAT THE PR OVISIONS 01 SECTION 145 ARE MANDATORY IN NATURE. FURTHER, SECTION 5 DEF INES THE SCOPE OF TOTAL INCOME. THE COMBINED READING OF THE PROVISION S OF SECTION 5 AND 145 SHOWN THAT THE TOTAL INCOME OF AN ASSESSEE SHAL L INCLUDE THE INCOME ON THE 7 BASIS OF SYSTEM OF ACCOUNTING REGULARLY EMPLOYED B Y HIM. THEREFORE, ONCE INCOME HAS ACCRUED AS PER THE METHO D OF ACCOUNTING FOLLOWED BY THE ASSESSEE, IT SHALL BE INCLUDED TOTA L INCOME. ADMITTEDLY, IN THE PRESENT CASE, THE ASSESSEE HAD BEEN FOLLOWIN G MERCANTILE SYSTEM OF ACCOUNTING AND, THEREFORE, ASSESSEE IS REQUIRED TO CREDIT THE INCOME ACCRUED ON ITS ASSETS INCLUDING NON-PERFORMING ASSE TS TO ITS PROFIT AND LOSS ACCOUNT. MERELY BECAUSE RBI HAS ISSUED CERTAIN GUIDELINE IN CASE ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 16 - OF RECOGNITION OF INCOME FROM NON PERFORMING ASSETS , IT WOULD NOT HE PROPER TO HOLD THAT INTEREST INCOME HAS NOT ACCRUED TO THE ASSESSEE ON ITS NON-PERFORMING ASSETS, IF ANY, DURING THE YEAR. THE ASSESSEE CANNOT POSTPONE THE INCOME OR, RECEIPT BASIS EXCEPT IN THE CASE OF CATEGORY OF ASSESSEE COVERED BY THE PROVISIONS OF SECTION 43D. AS ALREADY DISCUSSED, THE PROVISIONS OF SECTION 43D ARE NOT AP PLICABLE TO CO- OPERATIVE BANKS FOR THE YEAR UNDER CONSIDERATION AN D THEREFORE THE QUESTION OF EXTENDING THE BENEFIT UNDER SECTION 43D TO THE ASSESSEE BANK DOES NOT ARISE. 5.8 IT MAY BE RELEVANT TO REFER TO THE DECISION OF HON'BLE SUPREME COURT IN C1T VS SHIV PRAKASH JANAK RAJ AND CO PVT L TD 222 ITR 583 WHERE THE APEX COURT HAD AN OCCASION TO EXAMINE THE CONCEPT OF REAL INCOME AND REVIEW THE CASE LAW ON THE SUBJECT AND H ELD UNDER: IN SLATE BANK OF TRAUANCORE. V CIT (1986) 158 ITR 1 02/24 TAXMAN 337(SC), THIS COURT HELD THAT THE INTEREST ON STICKY ADVANCES DID ACCRUE TO THE ASSESSEE BANK ACCORDING TO THE ME RCANTILE SYSTEM OF ACCOUNTING AND THAT, INDEED THE ASSESSEE HAD DEBIT ED THE RESPECTIVE PARTIES WITH INTEREST. THE APPELLANT, HOWEVER DID N OT CHOOSE TO TREAT THE DEBT AS BAD DEBTS BUT CARRIED, THE INTEREST AMOUNT TO THE INTEREST 'SUSPENSE ACCOUNT' MERE CREDITING OF THE SAID INTER EST AMOUNT TO, WHAT IT CALLED THE 'INTEREST SUSPENSE ACCOUNT', WITHOUT TREATING IT AS BED DEBTS OR IRRECOVERABLE INTEREST, WAS REPAYMENT TO SECTION 36(1)(VII) AND SECTION 32(3)OF THE ACT AND THAT THE CONCEPT OF REA L INCOME DOES NOT HELP THE APPELLANT-BANK . IT WAS OBSERVED THE CONCE PT OF REAL INCOME CANNOT BE SO READ AS TO DEFEAT THE OBJECT AND THE P ROVISION OF THE ACT. SABYASACHI MILKHARAJI J, IN HIS OPINION, DISCUSSED ALL THE RELEVANT CASES ON THE SUBJECT INCLUDING MORIN 'INDUSTRIES LTD'S CA SE(SUPRA) AND BIRAL GWALIOR(P) LTD'S CASE (SUPRA) AS WELL AS THE DECISI ON OF THIS COURT IN SHOOJI VALLABHDAS AND CO'S CASE (SUPRA) AND ST ATED THE PROPOSITION EMERGING THEREFROM IN THE FOLLOWING WORDS: '.... (1) IT IS THE INCOME WHICH HAS REALLY ACCRUED OR ARISEN TO THE ASSESSEE THAT THE TAXABLE WHETHER THE INCOME HAS RE ALLY ACCRUED OR ARISEN TO THE ASSESSEE MUST BE JUDGED IN THE LIGHT OF THE REALITY OF THE SITUATION. (2) THE CONCEPT OF REAL INCOME WOULD APP LY WHERE THERE HAS BEEN A SURRENDER OF INCOME WHICH IN THEORY MAY HAVE ACCRUED BUT IN THE REALITY OF THE SITUATION, NO INCOME HAD RESULTED BE CAUSE THE INCOME DID ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 17 - NOT REALLY ACCRUE. (3)WHERE A DEBT HAS BECOME BAD, DEDUCTION IN COMPLIANCE WITH THE PROVISION OF THE ACT SHOULD BE CLAIMED AND ALLOWED. (4) WHERE THE ACT APPLIES, THE CONCEPT OF REAL INCOME SHOULD NOT BE SO READ AS TO DEFEAT THE PROVISIONS OF THE A CT. (5) IF THERE IS ANY DIVERSION OF INCOME AT SOURCE UNDER ANY STATUTE OR BY OVERRIDING TITLE, THEN THERE IS NO INCOME TO THE ASSESSEE. (6) THE CO NDUCT OF THE PARTIES IN TREATING THE INCOME IN A PARTICULAR MANNER IS MATER IAL EVIDENCE OF THE FACT WHETHER INCOME HAS ACCRUED OR NOT. (7) MERE IM PROBABILITY OF RECOVERY, WHERE THE CONDUCT OF THE ASSESSES IS UNEQ UIVOCAL, CANNOT BE TREATED AS EVIDENCE OF THE FACT THAT INCOME HAS NOT RESULTED OR ACCRUED TO THE ASSESSEE. AFTER DEBITING THE DEBTOR'S ACCOUN T AND NOT REVERSING THAT ENTRY - BUT TAKING THE INTEREST MERELY TO A SU SPENSE ACCOUNT CANNOT BE SUCH EVIDENCE TO SHOW THAT NO REAL INCOME HAS AC CRUED TO THE ASSESSEE AS HAS BEEN TREATED AS SUCH BY THE ASSESSE E. (8) THE CONCEPT OF REAL INCOME IS CERTAINLY APPLICABLE IN JUDGING WHET HER THERE HAS INCOME OR NOT BUT, IN EVERY CASE, IT MUST BE APPLIED WITH CARE AND WITHIN WELL- RECOGNIZED LIMITS' (P-104) TO THE ARGUMENT OF REAL INCOME PRESSED WITH GREAT P ERSISTENCE IN THAT CASE, THE LEARNED JUDGER RESPONDED IN THE FOLLOWING WORDS: 'WE WERE INVITED TO ABANDON LEGAL FUNDAMENTALISM. W ITH A PROBLEM LIKE THE PRESENT ONE, IS BETTER TO ADVICE TO THE BASIC F UNDAMENTALS OF THE LAW WITH CLARITY AND CONSISTENCY THAN TO BE CARRIED AWA Y BY COMMON CLICHES. THE CONCEPT OF REAL INCOME CERTAINLY IS AS WELL ACCEPTED ON AND MUST BE APPLIED IN APPROPRIATE CASES BUT WITH CIRCU MSPECTION AND MUST NOT BE CALLED IN AID TO DEFEAT THE FUNDAMENTAL PRIN CIPLES OF THE LAW OF INCOME-TAX, AS DEVELOPED'. WE RESPECTFULLY AGREE WI TH THE PROPOSITIONS AS WELL THE OBSERVATIONS OF THE LEARNED JUDGE WITH RESPECT TO THE PLEA OF REAL INCOME' THE CONCEPT OF REAL INCOME CANNOT BE EMPLOYED SO AS TO DEFEAT THE PROVISION OF THE ACT AND THE RULES. WHERE THE PROVI SIONS OF THE ACT AND THE RULES APPLY, IT IS ONLY THOSE PROVISIONS WHICH MUST BE APPLIED AND FOLLOWED. THERE IS NO ROOM-NOR WOULD BE PERMISSIBLE FOR THE COURT TO IMPORT THE CONCEPT OF REAL INCOME SO AS WHITTLE DOW N, QUALIFY OR DEFEAT THE PROVISIONS OF THE ACT AND THE RULES. 5.9 THUS, THE SUPREME COURT OBSERVE THAT THE CONCE PT OF REAL INCOME SHOULD NOT BE SO READ AS TO DEFEAT THE PROVISIONS O F THE ACT AND TO MAKE ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 18 - ACCRUED INCOME NO INCOME ON THE MERE IPSE DIXIT TO THE ASSESSEE. THE APEX COURT ALSO HELD THAT THE CONCEPT OF REAL INCOM E MUST BE APPLIED WITH EXTREME CAUTION AND THAT IT SHOULD NOT BE EXTE NDED TO THE AREAS WHERE IT HAS NO APPLICATION. IN THE CASE ON HAND, I T IS NOT IN DISPUTE THAT THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACC OUNTING AND THEREFORE THE INTEREST INCOME ON THE ADVANCES INCLU DING NPAS ACCRUED TO THE ASSESSEE U/S 5 R.W.S 145 OF THE I.T. ACT AND THE CASE OF THE ASSESSEE IS NOT COVERED BY SECTION 43D. IN SUCH, A SITUATION, THE CONCEPT 01 REALITY OF INCOME CANNOT BE UTILIZED FOR WHITTLI NG DOWN OR NULLIFYING THE PROVISION OF SECTION 5 OF THE I.T. ACT. UNDER S ECTION 5, INCOME HAS ACCRUED TO THE ASSESSEE DURING THE YEAR AND ACCORDI NGLY ENTRIES TO THAT EFFECT WERE MADE IN THE BOOKS OF ACCOUNTS OF THE BA NK AND SHOWN IN THE BALANCE SHEET EVEN, IF THE REALIZATION OF THE INTER EST AMOUNT IS DELAYED. THEREFORE, IT CANNOT BE SAID THAT WHAT IS ASSESSED IS NOTIONAL INCOME OR HYPOTHETICAL INCOME OR UNREAL INCOME. 5.10 TO SUM UP, RBI GUIDELINE HAVE BEEN ISSUED UNDE R DELEGATED LEGISLATION FOR THE PURPOSE OF EFFECTIVE SUPERVISIO N AND CONTROL OF MONETARY AND SYSTEM AND TO SUPERVISE AND EXERCISE C ONTROL ON BANKS AND NBFCS. THE RBI GUIDELINE WOULD NOT OVERRIDE THE '.MANDATORY PROVISIONS OF SECTION 145 AND ACCRUAL OF INCOME UND ER SECTION 5 (HE- INCOME-TAX ACT. SINCE THE ASSESSEE WAS FOLLOWING ME RCANTILE SYSTEM OF ACCOUNTING, THE INTEREST INCOME FROM ASSETS INCLUDI NG NPAS HAS TO BE ASSESSED TO TAX ON ACCRUAL BASIS. ACCORDINGLY, THE INTEREST INCOME OF RS 41,18,29,397/- ON LOANS AND ADVANCE CLAIMED TO BE N PA ACCOUNTS IS HEREBY ADDED BACK TO THE TOTAL INCOME OF THE ASSESS EE. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE I.T. ACT ARE BEING INITIATED FOR CONCEALING THE PARTICULARS OF INCOME AND FURNIS HING INACCURATE PARTICULARS OF INCOME. [ADDITION OF RS.41,18,29,397/-] IN APPEAL, THE LEARNED CIT(A) DELETED THE SAME FOLL OWING THE ORDER PASSED BY HIS PREDECESSOR IN ASSESSEES OWN CASE FO R A.Y. 2013-14. HENCE, THE INSTANT APPEAL BY THE REVENUE BEFORE US. 11. AT THE TIME OF HEARING OF THE INSTANT APPEAL, T HE LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE IS ENTIRELY COVERED ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 19 - IN ASSESSEES OWN CASE FOR A.Y. 2013-14 WHICH WAS F OLLOWED BY THE LEARNED CIT(A) WHILE DELETING THE ADDITION MADE BY THE LEAR NED AO. IT WAS FURTHER CONTENDED BY THE LEARNED SENIOR COUNSEL THAT ONCE I T IS ESTABLISHED THAT THE ASSESSEE IS A SCHEDULED BANK AS PER THE NOTIFICATIO N BY THE RBI AND THE INTEREST AS ACCRUED ON NON-PERFORMING ASSETS AS HAS BEEN CLA RIFIED BY THE RBI THE BENEFIT OF SECTION 43D WOULD BE APPLICABLE TO THE I NSTANT CASE AND THE SAME CANNOT BE ADDED BY TAKING SHELTER OF SECTION 145 OF THE ACT. HE ALSO RELIED UPON THE JUDGMENT PASSED BY THE HONBLE HIGH COURT IN THE MATTER OF PCIT-1, RAJKOT-VS-KUTCH DISTRICT CENTRAL CO-OP. BANK LTD. W HERE THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. A COPY WHEREOF W AS ALSO DULY SUBMITTED BEFORE US. HOWEVER, THE LEARNED DR RELIED UPON THE ORDER PASSED BY THE LEARNED AO. 12. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEV ANT MATERIALS AVAILABLE ON RECORD. WE FIND FROM THE RECORDS THAT THE LEARNED C IT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE BY DELETING THE ADD ITION MADE BY THE LEARNED AO FOLLOWED THE ORDER PASSED BY HIS PREDECESSOR IN ASSESSEES OWN CASE FOR A.Y. 2013-14. APART FROM THAT, WE HAVE ALSO CAREFUL LY CONSIDERED THE ORDER PASSED BY THE JURISDICTIONAL HIGH COURT AS CITED AB OVE WHERE THE HONBLE HIGH COURT OBSERVED AS FOLLOWS: 2. RESPONDENT ASSESSEE IS A COOPERATIVE BANK. FOR THE ASSESSMENT YEAR 2010-11, THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 14-10- 2010 DECLARING TOTAL LOSS OF RS. 3.22 CRORES (ROUND ED OFF). THE RETURN WAS TAKEN IN SCRUTINY. DURING SUCH SCRUTINY ASSESSM ENT, ONE OF THE ISSUES EXAMINED BY THE ASSESSING OFFICER WAS OF THE ASSESSEE'S CLAIM OF DEDUCTION OF RS. 93.03 LAKHS. THE ASSESSING OFFICER NOTICED THAT THE P & L ACCOUNT, THE ASSESSEE HAD DEBITED THE SAID SUM UN DER THE HEAD 'RESERVE FOR OVERDUE INTEREST'. THE ASSESSING OFFIC ER CALLED UPON THE ASSESSEE TO EXPLAIN THIS, IN RESPONSE TO WHICH, THE ASSESSEE CONVEYED ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 20 - THAT THE ASSESSEE IS A COOPERATIVE BANK GOVERNED BY THE GUJARAT COOPERATIVE SOCIETIES ACT, 1961, BANKING REGULATION S ACT, 1949 AND THE RULES AND REGULATIONS FRAMED BY THE RESERVE BANK OF INDIA ('RBI' FOR SHORT), AS PER WHICH, IT IS MANDATORY FOR THE BANK TO FOLLOW DIRECTIVES ISSUED BY THE RBI. DURING THE YEAR UNDER CONSIDERAT ION, THE BANK HAD MADE A PROVISION FOR OVERDUE INTEREST OF RS. 93.03 LAKHS AGAINST INTEREST ACCRUED BUT NOT RECEIVABLE ON NON PERFORMING ASSETS WHICH WERE IRRECOVERABLE, STICKY LOANS, OR DOUBTFUL LOANS. THE ASSESSEE POINTED OUT THAT AS PER THE RESERVE BANK OF INDIA CIRCULAR DATE D 22-06-1996, THE BANK HAD TO FOLLOW PRUDENTIAL NORMS OF STATE CENTRA L COOPERATIVE BANKS AND DISTRICT CENTRAL COOPERATIVE BANKS. AS PE R THESE GUIDELINES, SUCH BANKS ARE REQUIRED TO MAKE 100% PROVISION FOR THE ENTIRE OVERDUE INTERESTS AS ON 31ST MARCH OF THE YEAR. THE BANK FU RTHER POINTED OUT THAT WHEN THE LOAN ITSELF HAD BECOME NPA, THERE WAS NO P OSSIBILITY OF RECOVERING THE INTEREST AND THUS NO PRUDENT BUSINES SMAN WOULD CONSIDER INTEREST ACCRUING OUT OF SUCH NPA AS INCOM E LEADING TO ADDITIONAL TAX BURDEN. 3. THE ASSESSING OFFICER WAS HOWEVER UNMOVED. HE WA S OF THE OPINION THAT THE ASSESSEE'S CASE WOULD BE GOVERNED UNDER SE CTION 36(1)(VIIA) OF THE ACT. WITHIN THE PARAMETERS OF SUCH PROVISIONS, THE DEDUCTION CANNOT BE GRANTED. THE RBI DIRECTIVES CANNOT GOVERN THE TA XABILITY OF THE INCOME. PRIMARILY ON SUCH GROUNDS, THE ASSESSING OF FICER ADDED BACK THE SAID SUM OF RS. 93.03 LAKHS WHICH WAS CLAIMED B Y WAY OF DEDUCTION BY THE ASSESSEE BY WAY OF PROVISION FOR OVERDUE INT EREST. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL. COMMI SSIONER OF INCOME TAX (APPEALS) ALLOWED THE APPEAL. HE RELIED ON THE DECISION OF INCOME TAX APPELLATE TRIBUNAL AND OF THE DELHI HIGH COURT IN CASE OF CIT V. VASISTH CHAY VYAPAR LTD. [2010] 8 TAXMANN.COM 145/[ 2Q11] 196 TAXMAN 169/330 ITR 440. 5. THE REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL BY THE IMPUGNED JUDGMENT, REJECTED THE REV ENUE'S APPEAL. THE TRIBUNAL RELIED ON ITS EARLIER JUDGMENT IN CASE OF THE ASSESSEE FOR EARLIER ASSESSMENT YEARS, IN WHICH, RELIANCE WAS PL ACED ON THE DECISION OF BOMBAY HIGH COURT IN CASE OF CIT V. DEOGIRI NAGA R SAHAKARI BANK LTD. [2017] 79 TAXMANN.COM 396/[2015] 379 ITR 24 (B OM). ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 21 - 6. LEARNED COUNSEL FOR THE REVENUE SUBMITTED THAT T HE DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT IN RESPECT OF ANY PR OVISION OF BAD AND DOUBTFUL DEBTS MADE BY A BANK COMES WITH THE CEILIN G OF PRESCRIBED PERCENTAGE OF THE TOTAL INCOME COMPUTED BEFORE MAKI NG ANY DEDUCTION UNDER CHAPTER VIA. THE COMMISSIONER OF INCOME TAX ( APPEALS) AS WELL AS THE TRIBUNAL GRANTED DEDUCTION IGNORING THIS STA TUTORY LIMITATION. COUNSEL FURTHER SUBMITTED THAT THE EFFECT OF THE DE CISION OF THE SUPREME COURT IN CASE OF SOUTHERN TECHNOLOGIES LIMITED V. J OINT CIT [2010] 187 TAXMAN 346/320 ITR 577 WAS NOT EXAMINED. IN THE SAID JUDGMENT, THE SUPREME COURT HAS HELD THAT THE RBI DIRECTIVES WOUL D NOT GOVERN THE TAXABILITY A CERTAIN RECEIPT. 7. ON THE OTHER HAND, LEARNED ADVOCATE SHRI DARSHAN PATEL AND SHRI BANDISH SOPARKAR APPEARING FOR THE ASSESSEES SUBMIT TED THAT THE BANK WAS BOUND BY THE RBI DIRECTIVES, AS PER WHICH, THE BANK WOULD HAVE TO MAKE 100% PROVISION FOR THE ENTIRE OVERDUE INTEREST ON NPA. THE ACCOUNT HAVING BECOME NON PERFORMING ACCOUNT, THERE WAS LITTLE CHANCE OF RECOVERING EVEN THE PRINCIPAL SUM. MERELY BECAUS E THE INTEREST GOES ON ACCRUING, THE SAME CANNOT BE TAXED EVEN THOUGH T HE POSSIBILITY OF RECOVERING INTEREST WAS ALMOST NONEXISTENT. LEARNED ADVOCATE SUBMITTED THAT VARIOUS COURTS HAVE TAKEN A SIMILAR VIEW AND G RANTED THE DEDUCTION ON THE PRINCIPAL OF TAXING REAL INCOME. OUR ATTENTI ON WAS DRAWN TO THE DECISION OF DIVISION BENCH OF THIS COURT IN CASE OF PR. CIT V. SHRI MAHILA SEWA SAHAKARI BANK LTD. [2016] 72 TAXMANN.CO M 117/242 TAXMAN 60/[2017] 395 ITR 324 (GUJARAT) IN WHICH THE SAID ISSUE CAME UP FOR CONSIDERATION. 8. IN OUR OPINION, ENTIRE ISSUE IS COVERED BY THE J UDGMENT OF THIS COURT IN CASE OF SHRI MAHILA SEWA SAHAKARI BANK LTD. (SUP RA). IN THE SAID CASE, THE COURT HAS CONSIDERED FOLLOWING SUBSTANTIA L QUESTION OF LAW: 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE INCOME TAX APPELLATE TRIBUNAL IS RIGHT IN LAW AND O N FACTS IN HOLDING THAT INTEREST ON NON PERFORMING ASSETS IS N OT TAXABLE ON ACCRUAL BASIS LOOKING TO THE GUIDELINES OF THE RESE RVE BANK OF INDIA ?' 9. THE COURT ANSWERED THE QUESTION IN FAVOUR OF TH E ASSESSEE AND CONCURRED WITH THE VIEW OF THE DELHI HIGH COURT IN CASE OF LASISTH CHAY ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 22 - VYAPAR LTD. (SUPRA). IN THE SAID DECISION, CONTRARY TO WHAT WAS ARGUED BEFORE US BY THE COUNSEL FOR THE REVENUE, THE COURT HAD NOT ONLY NOTICED BUT ALSO REFERRED TO AT SOME LENGTH THE JUDGMENT OF THE SUPREME COURT IN CASE OF SOUTHERN TECHNOLOGIES LIMITED (SUPRA). 10. IN THE RESULT, THE QUESTION IS ANSWERED IN FAVO UR OF THE ASSESSEE AND AGAINST THE REVENUE AND ALL TAX APPEALS ARE DISMISS ED. RELYING UPON THE RATIO LAID DOWN BY THE JURISDICTIO NAL HIGH COURT ON THE IDENTICAL ISSUE, WE FIND THE INTEREST ACCRUED O N NPA ACCOUNTS TO THE TUNE OF RS. 41,18,29,397/- WHICH WAS SHOWN AS OVERDUE INTEREST RESERVE IN THE BALANCE SHEET OF THE APPELLANT BEFORE US CANNOT BE TAXED SI NCE THE SAME WAS NOT POSSIBLE TO BE RECOVERED. THE NON-PERFORMING ASSET IS AN ASSET IN RESPECT OF WHICH INTEREST HAS REMAINED UNPAID AND HAS BECOME P AST DUE. ONCE A PARTICULAR ASSET IS SHOWN AS NPA THEN THE ASSUMPTION WOULD BE IT IS NOT YIELDING ANY REVENUE AND EVEN THE PRINCIPLE REPAYMENT IS DOUBTFU L. SINCE IT IS NOT YIELDING ANY REVENUE THE SAME CANNOT BE BROUGHT TO TAX. WE, THEREFORE, FIND NO INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) SO AS TO WARRANT INTERFERENCE. THUS REVENUES APPEAL IS FOUND TO BE DEVOID ANY MERIT AN D HENCE DISMISSED. 11. IN THE RESULT, REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18/06/2019 SD/- SD/- ( PRAMOD KUMAR ) ( M S. MADHUMITA ROY ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 18/06/2019 PRITI YADAV, SR.PS ITA NO.1864/AHD/2017 DCIT VS. THE KALUPUR COMMERCIAL CO-OP BANK LTD. ASSESSMENT YEAR 2014-15 - 23 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-10, AHMEDABAD. 5. , , / DR, ITAT, AHMEDABAD 6. !' #$ / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) , !' / ITAT, AHMEDABAD 1. DATE OF DICTATION 11.06.2019 (DICTATION PAGES 11) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12.06.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S , 18.06.2019 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. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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