ACIT, Circle-5(2), Ahmedabad V. The Navnirman Co. Op. Bank Ltd, Ahmedabad

ITA 338/AHD/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8060 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 12-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH
• Section: 143(3)

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 338/AHD/2018 ( ASSESSMENT YEAR : 2014-15) ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-5(2), AHMEDABAD / VS. THE NAVNIRMAN CO-OP. BANK LTD., SHRIMALI SOCIETY, NAVRANGPURA, AHMEDABAD - 380009 ./ ./ PAN/GIR NO. : AAIFB3955H ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SAURABH SINGH, SR. D.R. / RESPONDENT BY : NONE DATE OF HEARING 20/06/2018 !'# / DATE OF PRONOUNCEMENT 28/06/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-5, AHMEDAB AD (CIT(A) IN SHORT), DATED 20.11.2017 ARISING IN THE ASSESSMENT ORDER DATED ITA NO. 338/AHD/18 [ACIT VS. THE NAVNIRMAN CO-OP. BANK LTD.] A.Y. 2014-15 - 2 26.12.2016 PASSED BY THE ASSESSING OFFICER (AO) U/S . 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMEN T YEAR 2014-15. 2. THE SOLITARY ISSUE RAISED IN REVENUE'S 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 HON'BLE GUJARAT HIGH COURT IN THE CASE OF PRINC IPAL CIT VS. SHRI MAHILA SEWA SAHAKARI BANK LTD. (2016) 72 TAXMANN.CO M 117 (GUJ.). IT WAS HELD BY THE HON'BLE HIGH COURT THAT INTEREST ON NON-PERFORMING ASSETS IS NOT TAXABLE ON ACCRUAL BASIS ACCOUNTED FO R IN THE BOOKS HAVING REGARD TO THE GUIDELINES OF THE RBI. THE RE CENT DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VASIST H CHAY VYAPAR LTD. (2018) 90 TAXMANN.COM 365 (SC) HAS FORTIFIED T HIS VIEW TAKEN BY THE HON'BLE HIGH COURT IN CIT VS. VASISTH CHAY VYAP AR LTD. (2001) 196 TAXMAN 169 (DELHI). THE HON'BLE SUPREME COURT A FFIRMED THE VIEW OF HON'BLE HIGH COURT IN VASISTH CHAY VYAPAR L TD. THAT WHERE NO INTEREST WAS RECEIVED BY THE BANK ON MONEY ADVAN CED AND POSSIBILITY OF RECOVERY WAS ALMOST NIL AND WHERE AM OUNTS ADVANCED WERE CLASSIFIED AS NON-PERFORMING ASSETS (NPA) AS P ER PRUDENTIAL NORMS ISSUED BY RBI, THE INTEREST COULD NOT BE TREA TED TO HAVE ACCRUED IN FAVOUR OF ASSESSEE AND WAS THEREFORE NOT ELIGIBL E TO TAX. ITA NO. 338/AHD/18 [ACIT VS. THE NAVNIRMAN CO-OP. BANK LTD.] A.Y. 2014-15 - 3 4. IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HON'B LE SUPREME COURT AND HON'BLE GUJARAT HIGH COURT ON THE IDENTIC AL ISSUE, WE DO NOT FIND ANY ERROR IN THE CONCLUSION DRAWN BY THE C IT(A) IN FAVOUR OF ASSESSEE. THUS, WE DECLINE TO INTERFERE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (MADHUMITA ROY) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: 28/06/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 28/06/20 18