United Mercantile Cooperative Bank Ltd., Kanpur V. Asstt. Commissioner of Income Tax -1, Kanpur

ITA 521/LKW/2012

• Counselvise Citation: 52123714 RSA 2012
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: P K KAPOOR
• Keywords: Principle of natural justice; Bad and doubtful debts; Revised return
• Section: 143(3); 139(5)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.521/LKW/2012 ASSESSMENT YEAR:2009 - 10 UNITED MERCANTILE CO - OPERATIVE BANK LTD., 106/382, GANDHI NAGAR, KANPUR. PAN:AAACU2045A VS. A.C.I.T. - I, KANPUR. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI P. K. KAPOOR, C.A. RESPONDENT BY SHRI Y. P. SRIVASTAVA, D. R. DATE OF HEARING 07/05/2014 DATE OF PRONOUNCEMENT 2 7 /05/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (A) - II, KANPUR DATED 19/07/2012 FOR ASSESSMENT YEAR 2009 - 2010. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE SELECTION OF THE CASE FOR 'SCRUTINY ASSESSMENT', THROUGH 'COMPUTER AIDED SCRUTINY SCHEME' (CASS) IS VIOLATIVE OF PROVISIONS CONTAINED IN CLAUSE (II) OF SUB SECTION (2) OF SECTION 143 OF THE ACT, WITH THE CO NSEQUENCE THAT THE ASSESSMENT ORDER DATED 23.11.2011 AS HAS BEEN IMPUGNED IN THIS APPEAL IS VOID AB - INITIO. 2. BECAUSE AS PER CLAUSE (II) OF SUB - SECTION (2) OF SECTION 143 OF THE ACT, NOTICE FOR SELECTING A CASE FOR SCRUTINY ASSESSMENT HAS TO BE NECESSARI LY BASED ON THE SATISFACTION RECORDED/OPINION EXPRESSED BY THE ASSESSING OFFICER HIMSELF AND NOTICE DATED 19.08.2010 ISSUED ON THE BASIS OF SELECTION UNDER COMPUTER AIDED SCRUTINY SCHEME (CASS) IS WHOLLY ILLEGAL AND CONSEQUENTLY THE ASSESSMENT ORDER 2 PASSED UNDER SECTION 143(3) IN PURSUANCE OF THE SAID NOTICE IS LIABLE TO BE TREATED AS NULL AND VOID. 3. BECAUSE IN ANY CASE THE APPELLANT STOOD ASSESSED UNDER SECTION 143(1) WITH REFERENCE TO THE REVISED RETURN FILED UNDER SECTION 139(5) OF THE ACT, ON 10.11.2 010, AFTER ISSUANCE OF NOTICE UNDER SECTION 143(2) DATED 19.08.2010 AND ACCORDINGLY THE ASSESSMENT ORDER DATED 23.11.2011 AS ALSO THE VARIATION BETWEEN THE 'RETURNED INCOME (AS REVISED)' AND THE 'ASSESSED INCOME' IS WHOLLY ILLEGAL AND WITHOUT JURISDICTION . WITHOUT PREJUDICE TO THE AFORESAID 4. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN DISALLOWING/UPHOLDING DISALLOWANCE ON ACCOUNT OF PROVISION FOR NON - PERFORMING ASSETS (NPS), TO THE EXTENT OF RS.45,93,201/ - AS WORKED OUT HEREUNDER: - PROVISIONS FOR NPS MADE BY THE APPELLANT AND DISALLOWED AS SUCH IN THE ASSESSMENT RS.52,29,511/ - DEDUCT: AMOUNT ALLOWED TO THE EXTENT OF 7.5% OF THE INCOME COMPUTED, AS PER PROVISIONS CONTAINED IN SECTION 36(1)(VIIIA) OF THE ACT 8.36,310/ - 45,93,201/ - 5. BECAUSE RELIANCE ON VARIOUS CASE LAWS AS REFERRED TO BY THE 'CIT(A)' IS WHOLLY MISPLACED AS THE SAID CASE LAWS ARE DISTINGUISHABLE ON FACTS AS PER RESUME GIVEN IN ANNEXURE - L, HERETO, AND ACCORDINGLY THE DISALLOWANCE OF RS.45,93,201/ - AS SUSTAINED IN APPEAL IS WHOLLY VITIATED. 6. BECAUSE IN ANY CASE, WHOLE OF THE CLAIM AMOUNTING TO RS.54,29,511/ - AS HAS BEEN MADE BY THE APPELLANT, WAS ALLOWABLE UNDER SECTION 43D OF THE ACT AND VIEW TO THE CONTRARY AS HAS BEEN TAKEN BY THE AUTHORITIES BELOW IS WHOLLY ERRONEOUS. 7. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 3 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT GROUND NO. 1 & 2 OF THE APPEAL ARE NOT PRESSED AND ACCORDINGLY THESE GROUNDS ARE REJECTED AS NOT PRESSED. 4. REGARDING GROUND NO. 3, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT REVISED RETURN WAS FILED BY THE ASSESSEE U/S 139(5) OF THE ACT ON 10/11/2010 AFTER ISSUANCE OF NOTICE U/S 143(2) ON 19/08/2010 BUT NO NOTICE U/S 143(2) WAS ISSUED AFTER FILING OF THE REVISED RETURN AND THEREFORE, THE ASSESSMENT IS WITHOUT JURISDICTION. AT THIS STAGE A QUERY WAS RAISED BY THE BENCH REGARDING THE EVIDE NCE FOR FILING THE REVISED RETURN OF INCOME STATED TO BE FILED ON 10/11/2010 BUT HE COULD NOT PRODUCE ANY EVIDENCE AND REGARDING THIS DATE OF 10/11/2010, IT WAS NOTICED THAT IN THE ASSESSMENT ORDER , IT IS NOTED BY THE ASSESSING OFFICER THAT THE REVISED RET URN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT ON 10/11/2010 AND HENCE, IT MAY BE A FACT THAT THE REVISED RETURN WAS FILED BEFORE 19/08/2010 WHEN NOTICE WAS ISSUED BY THE ASSESSING OFFICER U/S 143(2). IN ABSENCE OF ANY EVIDENCE RE GARDING FILING OF REVISED RETURN OF INCOME AFTER ISSUANCE OF NOTICE U/S 143(2) ON 19/08/2010, THE GROUND RAISED BY THE ASSESSEE DOES NOT SURVIVE. THIS GROUND IS REJECTED. 5. REGARDING GROUND NO. 4, 5 & 6, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE RELIANCE IS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (I) TVS FINANCE AND SERVICES LTD. VS JOINT COMMISSIONER OF INCOME - TAX [2009] 318 ITR 435 (MAD) (II) SUNDARAM FINANCE LIMITED VS ASSISTANT COMMISSIONER OF INCOME - TAX [2009] 318 ITR 452 ( MAD) (III) ART LEASING LIMITED VS. CIT [2010] 33 DTR 277 (KER) 6. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THIS ISSUE HAS BEEN DECIDED BY LEARNED CIT(A) AS PER THE FOLLOWING PARA, WHICH IS REPRODUCED BELOW FOR SAKE OF READY REFERENCE: GROUND NO. 3 & 4 RELATE TO ADDITION OF RS.52, 29,511/ - BEING PROVISION OF NPA DEBITED TO PROFIT & LOSS ACCOUNT. ON EXAMINATION OF THE FACTS, IT IS FOUND THAT THE PROVISION OF NPA AMOUNTING TO RS.54,29,511/ - DEBITED TO THE PROFIT & LOSS ACCOUNT DURING THE YEAR HAS NOT BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNT BY THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER HAS RIGHTLY APPLIED THE PROVISIONS OF SECTION 36(1)(VIIA). THE ASSESSING OFFICERS AC TION IS FURTHER SUBSTANTIATED BY THE FOLLOWING PRONOUNCEMENTS: 1 . SUNDARAM FINANCE LIMITED VS ASSISTANT COMMISSIONER OF INCOME - TAX [2009] 318 ITR 452 (MAD) 2 . TVS FINANCE AND SERVICES LTD. VS JOINT COMMISSIONER OF INCOME - TAX [2009] 318 ITR 435 (MAD) 3 . ART LEASING LIMITED VS. CIT 43 ITR 277 (KER.) IN VIEW OF THE ABOVE DISCUSSIONS AND DECISIONS, THE ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY CONFIRMED. 7.1 FIRST OF ALL , WE FEEL IT PROPER THAT THE PROVISIONS CONTAINED IN SECTION 36(1)(VIIA) BEING RELEVANT SHOULD BE REPRODUCED FOR THE SAKE OF READY REFERENCE: (VIIA) IN RESPECT OF ANY PROVISION FOR BAD AND DOUBTFUL DEBTS MADE BY - (A) A SCHEDULED BANK NOT BEING A BANK INCORPORATED BY OR UNDER THE LAWS OF A COUNTRY OUTSIDE INDIA] OR A NON - SCHEDULED BANK 3OR A CO - OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK, AN AMOUNT [NOT EXCEEDING SEVEN AND ONE - HALF PER CENT. OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VI - A) AND AN AMOUNT NOT EXCEEDING TEN PER CENT. OF THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK COMPUTED IN THE PRESCR IBED MANNER : PROVIDED THAT A SCHEDULED BANK OR A NON - SCHEDULED BANK REFERRED TO IN THIS SUB - CLAUSE SHALL, AT ITS OPTION, BE ALLOWED IN ANY OF THE RELEVANT ASSESSMENT YEARS, DEDUCTION IN RESPECT OF ANY PROVISION 5 MADE BY IT FOR ANY ASSETS CLASSIFIED BY TH E RESERVE BANK OF INDIA AS DOUBTFUL ASSETS OR LOSS ASSETS IN ACCORDANCE WITH THE GUIDELINES ISSUED BY IT IN THIS BEHALF, FOR AN AMOUNT NOT EXCEEDING FIVE PER CENT. OF THE AMOUNT OF SUCH ASSETS SHOWN IN THE BOOKS OF ACCOUNT OF THE BANK ON THE LAST DAY OF TH E PREVIOUS YEAR : PROVIDED FURTHER THAT FOR THE RELEVANT ASSESSMENT YEARS COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 2003 AND ENDING BEFORE THE 1ST DAY OF APRIL, 2005, THE PROVISIONS OF THE FIRST PROVISO SHALL HAVE EFFECT AS IF FOR THE WORDS 'FIVE PER CENT.', THE WORDS 'TEN PER CENT.' HAD BEEN SUBSTITUTED : PROVIDED ALSO THAT A SCHEDULED BANK OR A NON - SCHEDULED BANK REFERRED TO IN THIS SUB - CLAUSE SHALL, AT ITS OPTION, BE ALLOWED A FURTHER DEDUCTION IN EXCESS OF THE LIMITS SPECIFIED IN THE FOREGOING PR OVISIONS, FOR AN AMOUNT NOT EXCEEDING THE INCOME DERIVED FROM REDEMPTION OF SECURITIES IN ACCORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT : PROVIDED ALSO THAT NO DEDUCTION SHALL BE ALLOWED UNDER THE THIRD PROVISO UNLESS SUCH INCOME HAS BEEN DIS CLOSED IN THE RETURN OF INCOME UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' : EXPLANATION. - FOR THE PURPOSES OF THIS SUB - CLAUSE, 'RELEVANT ASSESSMENT YEARS' MEANS THE FIVE CONSECUTIVE ASSESSMENT YEARS COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 2000, AND ENDING BEFORE THE 1ST DAY OF APRIL, 2005 ; (B) A BANK, BEING A BANK INCORPORATED BY OR UNDER THE LAWS OF A COUNTRY OUTSIDE INDIA, AN AMOUNT NOT EXCEEDING FIVE PER CENT. OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VI - A) ; (C) A PUBLIC FINANCIAL INSTITUTION OR A STATE FINANCIAL CORPORATION OR A STATE INDUSTRIAL INVESTMENT CORPORATION, AN AMOUNT NOT EXCEEDING FIVE PER CENT. OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VI - A) : PROVIDED THAT A PUBLIC FINANCIAL INSTITUTION OR A STATE FINANCIAL CORPORATION OR A STATE INDUSTRIAL INVESTMENT CORPORATION REFERRED TO IN THIS SUB - CLAUSE SHALL, AT ITS OPTION, BE ALLOWED IN ANY OF THE TWO CONSECUTIVE ASSESSMENT YEARS COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 2003 AND ENDING BEFORE THE 1ST DAY OF APRIL, 2005, DEDUCTION IN RESPECT OF ANY PROVISION MADE BY IT FOR ANY ASSETS CLASSIFIED BY THE RESERVE BANK OF INDIA AS DOUBTFUL ASSETS OR LOSS ASSETS IN ACCORDANCE W ITH THE GUIDELINES ISSUED BY IT IN THIS BEHALF, OF AN AMOUNT NOT EXCEEDING TEN PER CENT. OF THE AMOUNT OF SUCH ASSETS SHOWN IN THE 6 BOOKS OF ACCOUNT OF SUCH INSTITUTION OR CORPORATION, AS THE CASE MAY BE, ON THE LAST DAY OF THE PREVIOUS YEAR : EXPLANATION . - FOR THE PURPOSES OF THIS CLAUSE, - (I) 'NON - SCHEDULED BANK' MEANS A BANKING COMPANY AS DEFINED IN CLAUSE (C) OF SECTION 5 OF THE BANKING REGULATION ACT, 1949 (10 OF 1949), WHICH IS NOT A SCHEDULED BANK ; (IA) 'RURAL BRANCH' MEANS A BRANCH OF A SCHE DULED BANK [OR A NON - SCHEDULED BANK] SITUATED IN A PLACE WHICH HAS A POPULATION OF NOT MORE THAN TEN THOUSAND ACCORDING TO THE LAST PRECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF THE PREVIOUS YEAR ; (II) 'SCHED ULED BANK' MEANS THE STATE BANK OF INDIA CONSTITUTED UNDER THE STATE BANK OF INDIA ACT, 1955 (23 OF 1955), A SUBSIDIARY BANK AS DEFINED IN THE STATE BANK OF INDIA (SUBSIDIARY BANKS) ACT, 1959 (38 OF 1959), A CORRESPONDING NEW BANK CONSTITUTED UNDER SECTION 3 OF THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1970 (5 OF 1970), OR UNDER SECTION 3 OF THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1980 (40 OF 1980), OR ANY OTHER BANK BEING A BANK INCLUDED IN THE SECO ND SCHEDULE TO THE RESERVE BANK OF INDIA ACT, 1934 (2 OF 1934) ; (III) 'PUBLIC FINANCIAL INSTITUTION' SHALL HAVE THE MEANING ASSIGNED TO IT IN SECTION 4A OF THE COMPANIES ACT, 1956 (1 OF 1956) (IV) 'STATE FINANCIAL CORPORATION' MEANS A FINANCIAL COR PORATION ESTABLISHED UNDER SECTION 3 OR SECTION 3A OR AN INSTITUTION NOTIFIED UNDER SECTION 46 OF THE STATE FINANCIAL CORPORATIONS ACT, 1951 (63 OF 1951) ; (V) 'STATE INDUSTRIAL INVESTMENT CORPORATION' MEANS A GOVERNMENT COMPANY WITHIN THE MEANING OF SEC TION 617 OF THE COMPANIES ACT, 1956 (1 OF 1956), ENGAGED IN THE BUSINESS OF PROVIDING LONG - TERM FINANCE FOR INDUSTRIAL PROJECTS AND ELIGIBLE FOR DEDUCTION UNDER CLAUSE (VIII) OF THIS SUB - SECTION ; 4(VI) 'CO - OPERATIVE BANK', 'PRIMARY AGRICULTURAL CREDIT S OCIETY' AND 'PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK' SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN THE EXPLANATION TO SUB - SECTION (4) OF SECTION 80P . 7.2 FROM THE PROVISION S OF SECTION 36(1)(VIIA) REPRODUCED ABOVE, WE FIND THAT DEDUCTION IS ALLOWABLE UNDER THIS SECTION FOR AN AMOUNT NOT EXCEEDING 7 7% OF THE TOTAL INCOME COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VIA. AS PER THE ASSESSMENT ORDER, THE A SSESSING OFFICER HAS COMPUTED TOTAL INCOME OF RS. 1,11,50,794/ - BEFORE ALLOWING ANY DEDUCTION U/S 36(1)(VIIA) AND CHAPTER VIA OF THE ACT. THEREAFTER THE ASSESSING OFFICER HAS ALLOWED DEDUCTION U/S 36(1)(VIIA) OF THE ACT OF RS.8,36,310/ - TO THE EXTENT OF 7. 5% OF THE TOTAL INCOME SO COMPUTED AND THE NET INCOME WAS COMPUTED AT RS.1,03,14,480/ - . FROM THESE FACTS, IT IS CLEARLY EVIDENT THAT THE MAXIMUM AMOUNT OF DEDUCTION ALLOWABLE U/S 36(1)(VIIA) HAS BEEN ALLOWED BY THE ASSESSING OFFICER. IN ADDITION TO THIS, DEDUCTION IS ALSO ALLOWABLE TO THE EXTENT OF 10% OF THE AGGREGATE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK COMPUTED IN THE PRESCRIBED MANNER. REGARDING THIS ASPECT, A SPECIFIC QUERY WAS RAISED AND IN REPLY , IT WAS SUBMITTED THAT THE ASSES SEE IS NOT HAVING ANY RURAL BRANCH. UNDER THESE FACTS, MAXIMUM DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 36(1)(VIIA) HAS BEEN ALLOWED BY THE ASSESSING OFFICER AND UNDER TH I S FACTUAL POSITION, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER PASSED BY LEA RNED CIT(A). WE, THEREFORE, DECLINE TO INTERFERE IN THE ORDER CIT(A) ON THIS ISSUE. THE JUDGMENTS CITED ARE NOT BEING DISCUSSED BECAUSE NO JUDGMENT CAN AMEND THE LAW TO ALLOW DEDUCTION OF AN AMOUNT IN EXCESS OF MAXIMUM DEDUCTION ALLOWABLE AS PER SPECIFIC PROVISIONS OF THE ACT. 7.3 REGARDING THE CONTENTION RAISED BY THE ASSESSEE IN RESPECT OF ALLOWABILITY OF DEDUCTION U/S 43D OF THE ACT, WE FIND THAT THE PROVISIONS OF SECTION 43D ARE NOT APPLICABLE IN THE PRESENT CASE. FOR THE SAKE OF READY REFERENCE, WE REPRODUCE SECTION 43D AS UNDER: 43D. SPECIAL PROVISION IN CASE OF INCOME OF PUBLIC FINANCIAL INSTITUTIONS, PUBLIC COMPANIES, ETC. -- NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER PROVISION OF THIS ACT, -- (A) IN THE CASE OF A PUBLIC FINANCIAL INSTITUTION OR A SCHEDULED BANK OR A STATE FINANCIAL CORPORATION OR A STATE INDUSTRIAL INVESTMENT CORPORATION, THE INCOME BY WAY OF INTEREST IN RELATION TO SUCH CATEGORIES OF BAD OR 8 DOUBTFUL DEBTS AS MAY BE PRESCRIBED HAVING REGARD TO THE GUIDELINES ISSUED BY THE RESERVE BANK OF INDIA IN RELATION TO SUCH DEBTS ; (B) IN THE CASE OF A PUBLIC COMPANY, THE INCOME BY WAY OF INTEREST IN RELATION TO SUCH CATEGORIES OF BAD OR DOUBTFUL DEBTS AS MAY BE PRESCRIBED HAVING REGARD T O THE GUIDELINES ISSUED BY THE NATIONAL HOUSING BANK IN RELATION TO SUCH DEBTS, SHALL BE CHARGEABLE TO TAX IN THE PREVIOUS YEAR IN WHICH IT IS CREDITED BY THE PUBLIC FINANCIAL INSTITUTION OR THE SCHEDULED BANK OR THE STATE FINANCIAL CORPORATION OR THE ST ATE INDUSTRIAL INVESTMENT CORPORATION OR THE PUBLIC COMPANY TO ITS PROFIT AND LOSS ACCOUNT FOR THAT YEAR OR, AS THE CASE MAY BE, IN WHICH IT IS ACTUALLY RECEIVED BY THAT INSTITUTION OR BANK OR CORPORATION OR COMPANY, WHICHEVER IS EARLIER. EXPLANATION. -- FO R THE PURPOSES OF THIS SECTION, -- (A) 'NATIONAL HOUSING BANK' MEANS THE NATIONAL HOUSING BANK ESTABLISHED UNDER SECTION 3 OF THE NATIONAL HOUSING BANK ACT, 1987 (53 OF 1987) ; (B) 'PUBLIC COMPANY' MEANS A COMPANY, (I) WHICH IS A PUBLIC COMPANY WITH IN THE MEANING OF SECTION 3 OF THE COMPANIES ACT, 1956 (1 OF 1956) ; (II) WHOSE MAIN OBJECT IS CARRYING ON THE BUSINESS OF PROVIDING LONG - TERM FINANCE FOR CONSTRUCTION OR PURCHASE OF HOUSES IN INDIA FOR RESIDENTIAL PURPOSES ; AND (III) WHICH IS REGISTERED IN ACCORDANCE WITH THE HOUSING FINANCE COMPANIES (NHB) DIRECTIONS, 1989, GIVEN UNDER SECTION 30 AND SECTION 31 OF THE NATIONAL HOUSING BANK ACT, 1987 (53 OF 1987) ; (C) 'PUBLIC FINANCIAL INSTITUTION' SHALL HAVE THE MEANING ASSIGNED TO IT IN SE CTION 4A OF THE COMPANIES ACT, 1956 (1 OF 1956) (D) SCHEDULED BANK SHALL HAVE THE MEANING ASSIGNED TO IT IN CLAUSE (II) OF THE EXPLANATION TO CLAUSE (VIIA) OF SUB - SECTION (1) OF SECTION 36; (E) 'STATE FINANCIAL CORPORATION' MEANS A FINANCIAL CORPOR ATION ESTABLISHED UNDER SECTION 3 OR SECTION 3A OR AN INSTITUTION NOTIFIED UNDER SECTION 46 OF THE STATE FINANCIAL CORPORATIONS ACT, 1951 (63 OF 1951) ; (F) 'STATE INDUSTRIAL INVESTMENT CORPORATION' MEANS A GOVERNMENT COMPANY WITHIN THE MEANING OF SECTIO N 617 OF THE 9 COMPANIES ACT, 1956 (1 OF 1956), ENGAGED IN THE BUSINESS OF PROVIDING LONG - TERM FINANCE FOR INDUSTRIAL PROJECTS. 7.4 FROM THE ABOVE PROVISION S , IT IS SEEN THAT THE PROVISIONS OF THIS SECTION ARE APPLICABLE IN CASE OF PUBLIC FINANCIAL INSTITUTIONS AND PUBLIC COMPANIES. REGARDING THIS CLAIM, WE FIND THAT THE PROVISIONS OF 43D ARE TO THIS EFFECT THAT INTEREST INCOME IN RESPECT OF CERTAIN ADVANCES ARE CHARGEABLE TO TAX IN THE PREVIOUS YEAR IN WHICH I T IS CREDITED TO THE PROFIT & LOSS ACCOUNT OF THE FINANCIAL INSTITUTION OR SCHEDULED BANK OR A STATE FINANCIAL CORPORATION OR PUBLIC COMPANY FOR THAT YEAR OR AS THE CASE MAY BE IN WHICH IT IS ACTUALLY RECEIVED BY THAT INSTITUTION OR COMPANY, WHICHEVER IS E ARLIER. IN THE PRESENT CASE, THE DISPUTE IS NOT REGARDING TAXABILITY OF INCOME NOT ACCOUNTED FOR BY THE ASSESSEE COMPANY. THE DISPUTE IS REGARDING THE PROVISION FOR NPA AND FOR ALLOWING DEDUCTION FOR SUCH PROVISION FOR NPA , T HE PROVISION S OF SECTION 43D ARE NOT APPLICABLE. WE HAVE ALREADY SEEN THAT THE ASSESSING OFFICER HAS ALREADY ALLOWED DEDUCTION TO THE EXTENT OF MAXIMUM AMOUNT ALLOWABLE U/S 36(1)(VIIA) OF THE ACT AND HENCE, NO INTERFERENCE IS REQUIRED IN THE ORDER OF CIT(A). 8. IN THE RESULT, THE AP PEAL OF THE ASSESSEE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 7 / 05/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR