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

ITA 26/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5618 (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: 2010-2011
• 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 . .. . 26/DEL/201 26/DEL/201 26/DEL/201 26/DEL/201 6 66 6 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2010 2010 2010 2010 - -- - 11 1111 11 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 JHAJJAR CENTRAL CO M/S THE JHAJJAR CENTRAL CO M/S THE JHAJJAR CENTRAL CO M/S THE JHAJJAR CENTRAL CO - -- - OP. OP. OP. OP. BANK LTD., BANK LTD., BANK LTD., BANK LTD., MINI SECRETARIAT, GURGAON ROAD, MINI SECRETARIAT, GURGAON ROAD, MINI SECRETARIAT, GURGAON ROAD, MINI SECRETARIAT, GURGAON ROAD, JHAJJAR. JHAJJAR. JHAJJAR. JHAJJAR. PAN : AAAJT0887E. PAN : AAAJT0887E. PAN : AAAJT0887E. PAN : AAAJT0887E. (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 201 0-11 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-2, GURG AON DATED 29 TH OCTOBER, 2015. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL :- (I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) WAS RIGHT IN LAW AND FACTS IN DELETING THE ADDITION OF RS.2,92,59,873/- MADE BY A.O. ON ACCOUNT OF ACCRUED INTEREST ON LOANS WHICH ARE CLASSIFIED AS NON- PERFORMING ASSETS RELYING ON THE CASE OF THE ASSESSEE FOR A.Y. 2008-09 IN ITA NO.2486/DEL/2011, IGNORING THE PROVISION OF SECTION 43D OF THE I.T. ACT, 1961. (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) HAS ERRED IN HOLDING THAT INCOME ACCRU ED TO ITA-26/DEL/2016 2 THE ASSESSEE CANNOT BE TAKEN AS INCOME IN THE YEAR IGNORING THE AMENDED PROVISION OF SECTION 43D OF THE I.T. ACT, 1961, WHICH PROVIDED CERTAIN BENEFIT TO THE CE RTAIN CLASS OF ASSESSEE BUT DO NOT PROVIDE SUCH BENEFIT TO THE ASSESSEE BANK CONCERNED. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MA TERIAL PLACED BEFORE US, WE FIND THIS ISSUE TO BE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 VIDE ITA NO.2486/DEL/2011. IN FACT, LEARNED CIT(A) HAS ALLOWED THE RELIEF FOLLOWING THE DECISION OF ITAT, WHEREIN THE ITAT HELD AS UNDER :- CONSIDERING THE ABOVE SUBMISSION OF THE ASSESSEE WHICH IS WELL SUPPORTED BY RBI/NABARD CIRCULAR DATED 17/08/ 2002 VIDE PARA NO.3.1 CLEARLY STATES THAT THE POLICY OF IN COME RECOGNITION SHOULD BE BASED ON RECORD OF RECOVERY AN D THEREFORE UNREALIZED INCOME SHOULD NOT BE TAKEN INT O PROFIT AND LOSS ACCOUNT BY STATE CO-OP BANK/CENTRAL CO-OP B ANKS AND THAT THE PROVISIONS OF SECTION 43D OF THE ACT ARE CLEAR REGARDING THE RECOGNITION OF INTEREST INCOME ON NPA. THE LD.CIT(A) IN OUR VIEW HAS THUS RIGHTLY HELD THAT OVER DUE INTEREST NOT REALIZED DURING THE YEAR AND CREDITED T O SUSPENSE INTEREST ACCOUNT CANNOT BE TAKEN TO BE THE INCOME OF THE ASSESSEE. THUS THE LD.CIT(A) HAS THUS RIGHTLY DELETED THE ADDITION IN QUESTION. 4. THAT IN THE GROUNDS OF APPEAL, THE REVENUE HAS PL EADED FOR NOT FOLLOWING THE ABOVE ORDER OF THE ITAT ON THE BASIS OF PROVISION OF SECTION 43D OF THE INCOME-TAX ACT. WE FIND THAT SE CTION 43D HAS A SPECIAL PROVISION IN THE CASE OF INCOME OF PUBLIC FINA NCIAL INSTITUTION AND PUBLIC COMPANY ETC. THAT THIS PROVISION IS MADE APPLICABLE TO COOPERATIVE BANKS OTHER THAN PRIMARY AGRICULTURAL SOC IETY OR PRIMARY COOPERATIVE AGRICULTURAL AND RURAL 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 BA NK ONLY FROM ASSESSMENT YEAR 2018-19. THE YEAR UNDER CONSIDERATION B EFORE IS ITA-26/DEL/2016 3 2010-11. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISION OF ITAT IN ASSESSEES OWN CASE, UPHOLD THE ORDER OF THE LEAR NED CIT(A) AND DISMISS THE REVENUES APPEAL. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . 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 TAX , DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, R RR ROHTAK CIRCLE, ROHTAK. OHTAK CIRCLE, ROHTAK. OHTAK CIRCLE, ROHTAK. OHTAK CIRCLE, ROHTAK. 2. RESPONDENT : M/S THE JHAJJAR CENTRAL CO M/S THE JHAJJAR CENTRAL CO M/S THE JHAJJAR CENTRAL CO M/S THE JHAJJAR CENTRAL CO- -- -OP. BANK LTD., OP. BANK LTD., OP. BANK LTD., OP. BANK LTD., MINI SECRETARIAT, GURGAON ROAD, JHAJJAR. MINI SECRETARIAT, GURGAON ROAD, JHAJJAR. MINI SECRETARIAT, GURGAON ROAD, JHAJJAR. MINI SECRETARIAT, GURGAON ROAD, JHAJJAR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR