DCIT, Rohtak V. M/s The Rohtak Central Co-op Bank Ltd., Rohtak

ITA 25/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5615 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 01-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K BANSAL
• Section: 43D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT AND AND AND AND SHRI AMIT SHUKLA SHRI AMIT SHUKLA SHRI AMIT SHUKLA SHRI AMIT SHUKLA, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA ITAITA ITA NO NONO NO . .. . 2 22 2 5 55 5 /DEL/201 /DEL/201 /DEL/201 /DEL/201 6 66 6 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 201 201 201 201 2 22 2 - -- - 13 1313 13 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, ROHTAK CIRCLE, ROHTAK CIRCLE, ROHTAK CIRCLE, ROHTAK CIRCLE, ROHTAK. ROHTAK. ROHTAK. ROHTAK. V VV V S. S.S. S. M/S THE ROHTAK M/S THE ROHTAK M/S THE ROHTAK M/S THE ROHTAK CENTRAL CO CENTRAL CO CENTRAL CO CENTRAL CO - -- - OP. OP. OP. OP. BANK LTD., BANK LTD., BANK LTD., BANK LTD., BANK BUILDING, DELHI ROAD, BANK BUILDING, DELHI ROAD, BANK BUILDING, DELHI ROAD, BANK BUILDING, DELHI ROAD, ROHTAK. ROHTAK. ROHTAK. ROHTAK. PAN : PAN : PAN : PAN : AAAAT8736B. AAAAT8736B. AAAAT8736B. AAAAT8736B. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMIT KATOCH, SENIOR DR. RESPONDENT BY : SHRI S.K. BANSAL, CA. DATE OF HEARING : 30.01.2019 30.01.2019 30.01.2019 30.01.2019 DATE OF PRONOUNCEMENT : 01.02.2019 01.02.2019 01.02.2019 01.02.2019 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT : :: :- -- - THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2012-13 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-2, GUR GAON DATED 21 ST OCTOBER, 2015. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- (I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) WAS RIGHT IN LAW AND FACTS IN DELETIN G THE ADDITION OF RS.2,18,11,312/- MADE BY A.O. ON ACCOUN T OF ACCRUED INTEREST ON LOANS WHICH ARE CLASSIFIED AS NON- PERFORMING ASSETS RELYING ON THE CASE OF THE ASSES SEE FOR A.Y. 2007-08 IN ITA NO.2839/DEL/2011, IGNORING THE PROVISION OF SECTION 43D OF THE I.T. ACT, 1961. (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN HOLDING THAT INCOME ACCR UED TO THE ASSESSEE CANNOT BE TAKEN AS INCOME IN THE YEAR IGNORING THE AMENDED PROVISION OF SECTION 43D OF TH E I.T. ITA-25/DEL/2016 2 ACT, 1961, WHICH PROVIDED CERTAIN BENEFIT TO THE CE RTAIN CLASS OF ASSESSEE BUT DO NOT PROVIDE SUCH BENEFIT T O THE ASSESSEE BANK CONCERNED. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THIS ISSUE TO B E SQUARELY COVERED BY THE DECISION OF ITAT IN ASSESSEES OWN CASE IN I TA NO.2839/DEL/2011 FOR ASSESSMENT YEAR 2007-08, WHEREIN THE ITAT DELET ED THE ADDITION WITH THE FOLLOWING FINDING :- 3.4 WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. THE ISSUE IN QUESTION IS COVER ED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN THE CASE OF ACIT VS. THE JHAJJAR CENTRAL COOP. BANK (SU PRA). THE RELEVANT FINDING OF THE TRIBUNAL READS AS FOLLOW :- CONSIDERING THE ABOVE SUBMISSION OF THE ASSESSEE W HICH IS WELL SUPPORTED BY RBI/NABARD CIRCULAR DATED 17/08/2 002 VIDE PARA NO.3.1 CLEARLY STATES THAT THE POLICY OF INCOME RECOGNITION SHOULD BE BASED ON RECORD OF RECOVERY A ND THEREFORE UNREALIZED INCOME SHOULD NOT BE TAKEN INT O PROFIT AND LOSS ACCOUNT BY STATE CO-OP BANK/CENTRAL CO-OP BANKS AND THAT THE PROVISIONS OF SECTION 43D OF THE ACT A RE CLEAR REGARDING THE RECOGNITION OF INTEREST INCOME ON NPA . THE LD.CIT(A) IN OUR VIEW HAS THUS RIGHTLY HELD THAT OV ERDUE INTEREST NOT REALIZED DURING THE YEAR AND CREDITED TO SUSPENSE INTEREST ACCOUNT CANNOT BE TAKEN TO BE THE INCOME OF THE ASSESSEE. THUS THE LD.CIT(A) HAS THU S RIGHTLY DELETED THE ADDITION IN QUESTION. THE SAME IS UPHE LD. THERE IS NO SUBSTANCE IN THE CONTENTION OF THE LD.D R THAT THE ASSESSEE WAS HAVING NO OBJECTION TO THIS ADDITI ON, SINCE WE FIND THAT IT WAS AN ALTERNATIVE SUBMISSION OF TH E ASSESSEE BEFORE THE AO THAT EVEN IF ANY ADDITION I S TO BE MADE OF RS.1,29,91,989/- THEN ADDITION OF RS.1,00,5 1,715/- IS TO BE MADE ON ACCOUNT OF INTEREST OF EARLIER YEA RS CREDITED DURING THE YEAR TO P & L ACCOUNT. EVEN O THERWISE THE AO IS SUPPOSED TO MAKE JUST ASSESSMENT BASED ON THE PROVISIONS OF LAWS WHICH CAN NOT BE IGNORED SINCE I S AGREEABLE TO THE PROPOSED WRONG ADDITION. THE GROU ND NO.3 IS ACCORDINGLY REJECTED. ITA-25/DEL/2016 3 4. THAT THE REVENUE HAS ALSO CONSIDERED THE ABOVE D ECISION IN THE GROUNDS OF APPEAL ITSELF. HOWEVER, IN THE GROUNDS OF APPEAL, THE REVENUE HAS PLEADED FOR NOT FOLLOWING THE ABOVE ORD ER OF THE ITAT ON THE BASIS OF PROVISION OF SECTION 43D OF THE INCOME -TAX ACT. WE FIND THAT SECTION 43D HAS A SPECIAL PROVISION IN THE CAS E OF INCOME OF PUBLIC FINANCIAL INSTITUTION AND PUBLIC COMPANY ETC. THAT THIS PROVISION IS MADE APPLICABLE TO COOPERATIVE BANKS OTHER THAN PRI MARY AGRICULTURAL SOCIETY OR PRIMARY COOPERATIVE AGRICULTURAL AND RUR AL DEVELOPMENT BANK BY THE FINANCE ACT, 2017 WITH EFFECT FROM 1 ST APRIL, 2018. THEREFORE, THE PROVISION OF SECTION 43D WOULD BE APPLICABLE TO A COOPERATIVE BANK ONLY FROM ASSESSMENT YEAR 2018-19. THE YEAR UNDER CONSIDERATION BEFORE IS 2010-11. WE, THEREFORE, RESPECTFULLY FOL LOWING THE ABOVE DECISION OF ITAT IN ASSESSEES OWN CASE, UPHOLD THE ORDER OF THE LEARNED CIT(A) AND DISMISS THE REVENUES APPEAL. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 01.02.2019 . SD/- SD/- (AMIT SHUKLA (AMIT SHUKLA (AMIT SHUKLA (AMIT SHUKLA ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TA X, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, ROHTAK CIRCLE, ROHTAK. ROHTAK CIRCLE, ROHTAK. ROHTAK CIRCLE, ROHTAK. ROHTAK CIRCLE, ROHTAK. 2. RESPONDENT : M/S THE ROHTAK CENTRAL CO M/S THE ROHTAK CENTRAL CO M/S THE ROHTAK CENTRAL CO M/S THE ROHTAK CENTRAL CO- -- -OP. BANK LTD., OP. BANK LTD., OP. BANK LTD., OP. BANK LTD., BANK BUIL BANK BUIL BANK BUIL BANK BUILDING, DELHI ROAD,ROHTAK. DING, DELHI ROAD,ROHTAK. DING, DELHI ROAD,ROHTAK. DING, DELHI ROAD,ROHTAK. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR