The Dy. CIT, Circle-5(3), Ahmedabad V. The Sarangpur Co. Op. Bank Ltd., Ahmedabad

ITA 2129/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8374 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 26-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH SR DR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.2129/AHD/2017 ( / ASSESSMENT YEAR : 2010-11) THE DCIT CIRCLE-5(3) AHMEDABAD / VS. THE SARANGPUR CO-OP.BANK LTD. PRITAMNAGAR, FIRST DHAL, ELLISBRIDGE AHMEDABAD-380 006 # ./ ./ PAN/GIR NO. : AAAAT 2465 R ( #& / APPELLANT ) .. ( '#& / RESPONDENT ) #&( / APPELLANT BY : SHRI SAURABH SINGH, SR.DR '#& )( / RESPONDENT BY : -NONE- *+ ), / DATE OF HEARING 16/04/2018 -./0 ), / DATE OF PRONOUNCEMENT 17 / 04 /2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-AHMEDABAD-5 [CIT(A) IN SHORT] DATED 14/07/2017 ARISING IN THE ASSESSMENT ORDER PASSED DATED 29/12/2016 UN DER S.143(3) OF THE ITA NO.2129/AHD /2017 DCIT VS. THE SARANGPUR CO-OP.BANK LTD. ASST.YEAR 2010-11 - 2 - INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'T HE ACT') RELEVANT TO ASSESSMENT YEAR (AY) 2010-11. 2. THE SOLITARY ISSUE RAISED IN REVENUES APPEAL IS WHETHER THE ADDITION MADE TOWARDS INTEREST EARNED ON NON-PERFOR MING ASSETS IS TAXABLE ON ACCRUAL BASIS IN VIEW OF THE GUIDELINES OF THE RESERVE BANK OF INDIA (RBI) OR NOT? 3. WE FIND THAT THE IDENTICAL ISSUE CAME UP FOR ADJ UDICATION BEFORE THE HONBLE GUJARAT HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. SHRI MAHILA SEWA SAHAKARI BANK LTD. (2016) 72 TAXMANN.COM 117 (GUJ.). IT WAS HELD BY THE HONBLE HIGH COURT THAT INTEREST ON NON -PERFORMING ASSETS IS NOT TAXABLE ON ACCRUAL BASIS ACCOUNTED FOR IN THE B OOKS HAVING REGARD TO THE GUIDELINES OF THE RBI. THE RECENT DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VASISTH CHAY VYAPAR LT D. (2018) 90 TAXMANN.COM 365 (SC) HAS FORTIFIED THIS VIEW TAKEN BY THE HONBLE HIGH COURT IN CIT VS. VASISTH CHAY VYAPAR LTD. (2001) 19 6 TAXMAN 169 (DELHI). THE HONBLE SUPREME COURT AFFIRMED THE VI EW OF HONBLE HIGH COURT IN VASISTH CHAY VYAPAR LTD. THAT WHERE NO INT EREST WAS RECEIVED BY THE BANK ON MONEY ADVANCED AND POSSIBILITY OF R ECOVERY WAS ALMOST NIL AND WHERE AMOUNTS ADVANCED WERE CLASSIFIED AS N ON-PERFORMING ASSETS (NPA) AS PER PRUDENTIAL NORMS ISSUED BY RBI, THE INTEREST COULD NOT BE TREATED TO HAVE ACCRUED IN FAVOUR OF ASSESSE E AND WAS THEREFORE NOT EXIGIBLE TO TAX. ITA NO.2129/AHD /2017 DCIT VS. THE SARANGPUR CO-OP.BANK LTD. ASST.YEAR 2010-11 - 3 - 4. IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HONB LE SUPREME COURT AND HONBLE GUJARAT HIGH COURT ON THE IDENTICAL ISS UE, WE DO NOT FIND ANY ERROR IN THE CONCLUSION DRAWN BY THE CIT(A) IN FAVOUR OF ASSESSEE. THUS, WE DECLINE TO INTERFERE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 17/ 04 /2018 SD/- SD/- ( ) ( ) ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 17/ 04 /2018 4..*,.*../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '#& / THE RESPONDENT. 3. 567, 8, / CONCERNED CIT 4. 8, ( ) / THE CIT(A)-5, AHMEDABAD 5. 9:;,*67 , 67 0 , 5 / DR, ITAT, AHMEDABAD 6. ;<+ / GUARD FILE. / BY ORDER, '9,, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD