The Deputy Commissioner Of Income Tax Circle-1(2), Vadodara V. The Baroda Central Co. Op. Bank Ltd, Vadodara

ITA 2160/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8376 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 28-09-2017
• 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.2160/AHD/2017 ( / ASSESSMENT YEAR : 2014-15) THE DY.CIT RACE COURSE CIRCLE VADODARA-390 017 / VS. THE BARODA CENTRAL CO- OP.BANK LTD. STATION ROAD SYAJIGUNJ, VADOARA-390 005 # ./ ./ PAN/GIR NO. : AAAAT 1335 N ( #& / APPELLANT ) .. ( '#& / RESPONDENT ) #&( / APPELLANT BY : SHRI SAURABH SINGH, SR.DR '#& )( / RESPONDENT BY : -NONE- *+ ), / DATE OF HEARING 16/04/2018 -./0 ), / DATE OF PRONOUNCEMENT / 04 /2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTAN CE OF THE REVENUE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-4, VADODARA [CIT(A) IN SHORT] DATED 27/06/2017 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 13/12/2016 RELEVANT TO ASSESSMENT YEAR (AY) 2014-15. ITA NO.2160/AHD /2017 DCIT VS. THE BARODA CENTRAL CO-OP.BANK LTD. ASST.YEAR 2014-15 - 2 - 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. 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 ITA NO.2160/AHD /2017 DCIT VS. THE BARODA CENTRAL CO-OP.BANK LTD. ASST.YEAR 2014-15 - 3 - 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 / 04 /2018 ( ) ( ) ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED / 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)-4, VADODARA 5. 9:;,*67 , 67 0 , 5 / DR, ITAT, AHMEDABAD 6. ;<+ / GUARD FILE. / BY ORDER, '9,, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 16.4.18(DICTATION 5-AGES ATTA CHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.4.18 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. 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