M/s The Ambala Central Co-op Bank Limited, Ambala City V. ITO, Ambala

ITA 587/CHANDI/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9880 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 28-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: ANIL BATRA SH DEEPAK BATRA
• Keywords: Bad and doubtful debts; Notional interest
• Section: 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.587/CHD/2015 ASSESSMENT YEAR : 2010-11 THE AMBALA CENTRAL CO-OP BANK LTD. VS. THE ITO COURT ROAD WARD 1 AMBALA CITY AMBALA PAN NO. AAABT0447Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ANIL BATRA SH. DEEPAK BATRA RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 27/05/2016 DATE OF PRONOUNCEMENT : 16/06/2016 ORDER PER ANNAPURNA GUPTA, A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), PANCHKULA, DT. 17/04/2015. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS BAD AGAINST FACTS AND LAW. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES AND EVIDENCE PLACED ON RECORD GRAVELY ERRED IN CONCLUDING THAT THE SUM OF RS. 89,20,750/- WAS NOT CREDITED TO THE PROFIT & LOSS ACCOUNT AND HENCE THERE BEING NO MISTAKE APPARENT F ROM RECORD DECLINED THE APPLICATION U/S 154 OF THE INCOME TAX ACT, 1961 BY NOT DELETING THE SAID ADDITION OF RS. 89,20,750/-. THE CLAIM OF THE APPELLANT BE A CCEPTED. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT THE AS SESSEE IS AN AOP (CO- OPERATIVE BANK) DOING BUSINESS OF BANKING. DURING A SSESSMENT PROCEEDINGS FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE WAS ASKE D TO EXPLAIN WHY OVERDUE INTEREST OF RS. 7,56,56,086/- NOT SHOWN IN THE P&L ACCOUNT BUT REFLECTED IN THE CREDIT SIDE OF ITS BALANCE SHEET, BE NOT BROUGHT TO TAX. THE ASSESSEE FILED A DETAILED EXPLANATION, REPRODUCED IN THE ASSESSMENT ORDER, THE SUM AND 2 SUBSTANCE OF WHICH WAS THAT IT WAS MANDATED TO DO S O BY THE MASTER CIRCULAR OF RBI UNDER WHOSE LICENSE IT WAS FORMED, AND ALSO BY THE REAL INCOME THEORY OF THE INCOME TAX ACT PROPOUNDED IN VARIOUS JUDGMENTS OF THE APEX COURT, PRIMARILY UCO BANK VS. CIT (1999) 237 ITR 889(SC), AS ALSO SECTION 43D OF THE INCOME TAX ACT.,1961 LD. AO REJECTED THE CONTENTION OF THE ASSESSEE AND THEREBY BROUGHT TO TAX THE OVERDUE INTEREST OF RS. 7,56,56,086/- VIDE HIS ORDER DT. 26.03.2013. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS ORDER DT. 25/11/2014 ACCEPTED THE ASSESSES CONTENTI ON THAT THE PROVISIONS OF SECTION 43D APPLIED IN THE ASSESSES CASE AND APPLYI NG THE SAME ALONGWITH RULE 6EA OF THE INCOME TAX RULES, 1962, HELD THAT THE OV ERDUE INTEREST SHOWN BY THE ASSESSEE ON BAD AND DOUBTFUL DEBTS DECLARED AS NPA BY FOLLOWING THE RBI GUIDELINES IS NOT CHARGEABLE TO TAX IN THE YEAR UND ER CONSIDERATION EXCEPT INTEREST ON THE FOLLOWING ACCOUNTS. 1 INTEREST FOR THE YEAR 2009-10 ON OTHER ACCOUNTS NOT DECLARED AS NPA. RS. 15,12,754/- 2. INTEREST RECEIVED DURING THE YEAR 2009-10 BUT NOT SHOWN IN THE P&L ACCOUNT. RS. 89,20,750/- 3. INTEREST ON ACCOUNTS HAVING NPA DATE WITHIN 6 MONTHS FROM DATE OF SANCTION RS. 8,74,086/- 4. INTEREST ON ACCOUNTS WHERE DATE OF NPA IS AFTER 31.03.2010 RS. 2,74,326/- TOTAL RS. 1,15,81,916/- THUS OUT OF TOTAL ADDITION ON ACCOUNT OF OVERDUE IN TEREST OF RS. 7,56,56,086/-, ADDITION OF RS. 1,15,81,916/- WAS UPHELD BY THE LD. CIT(A). IMMEDIATELY THEREAFTER THE ASSESSEE MOVED A RECTIFI CATION APPLICATION U/S 154, REPRODUCED IN THE ORDER PASSED U/S 154, SEEKING TO DELETE THE ADDITION UPHELD BY THE CIT(A) OF RS. 89,20,750/- BEING OVERDUE INTE REST RECEIVED DURING THE YEAR, ON THE GROUND THAT THE SAME WAS ALREADY CREDITED TO THE P&L ACCOUNT AND TREATED AS INCOME OF THE ASSESSEE. LD. CIT(A) REJEC TED THE ASSESSES CONTENTION AND HELD THAT THERE WAS NO MISTAKE APPARENT FROM RE CORD SINCE AS PER THE ASSESSEES OWN SUBMISSION, THE IMPUGNED SUM HAD NOT BEEN SHOWN IN THE P&L 3 ACCOUNT AND FURTHER IT IS NOT APPARENT FROM THE DET AILS SUBMITTED THAT SUCH AMOUNT IS INCLUDED IN INCOME UNDER ANY HEAD SHOWN I N THE P&L ACCOUNT. LD. CIT(A) HELD AT PARA 3 OF HIS ORDER AS FOLLOWS: 3. I HAVE GONE THROUGH THE APPELLATE RECORD AND O RDER DATED 25.11.2014 IN THE APPELLANTS CASE. ONE OF THE GROUND OF APPEAL W AS AGAINST THE ADDITION OF RS. 7,56,56,086/- ON ACCOUNT OF NOTIONAL INTEREST O N NON PERFORMING ASSETS. DURING THE APPELLATE PROCEEDING THE COPY OF BALANCE SHEET AS ON 31.03.2010 WAS FILED SHOWING THE DETAILS OF OVERDUE INTEREST WHICH WAS D ISALLOWED BY THE AO. THE APPELLANT ALSO SUBMITTED A SUMMARY OF OVERDUE INTER EST AS ON 31.03.2010 SHOWING THE COMPUTATION OF BALANCE OF OVERDUE INTEREST. THE SUMMARY INCLUDES RECOVERY OF OVERDUE INTEREST DURING THE YEAR OF RS. 89,20,75 0/-. THE RECOVERY OF OVERDUE INTEREST DURING THE YEAR HAS BEEN REDUCED BEFORE AR RIVING THE BALANCE OF OVERDUE INTEREST WHICH HAS BEEN TAKEN IN THE BALANC E SHEET. AS PER APPELLANTS OWN SUBMISSION, ANY RECOVERY OF OVERDUE INTEREST MA DE DURING THE YEAR CONSTITUTES ITS INCOME. THEREFORE, AS PER SUBMISSIO NS MADE BY THE APPELLANT THE AMOUNT OF RS. 89,20,750/- WAS CONSIDERED AS INTERES T RECEIVED DURING THE YEAR BUT NOT SHOWN IN THE P&L ACCOUNT. THE APPELLANT HAS SHO WN INCOME BY WAY OF INTEREST RECEIVED IN THE P&L ACCOUNT ON VARIOUS ACC OUNTS SUCH AS LOAN, INVESTMENT, MISCELLANEOUS INCOME ETC. HOWEVER, THE AMOUNT OF RS. 89,20,750/- IS NEITHER REFLECTED ON THE INCOME SIDE IN THE P&L ACC OUNT NOR APPARENT FROM DETAILS THAT SUCH AMOUNT IS INCLUDED IN INCOME UNDE R ANY HEAD SHOWN IN P&L ACCOUNT. ACCORDINGLY, AS PER SUBMISSIONS MADE BY TH E APPELLANT, THE INTEREST RECOVERED DURING THE YEAR AND NOT FOUND CREDITED IN THE P&L ACCOUNT WAS CONSIDERED AS TAXABLE INCOME OF THE ASSESSEE. THE A PPELLANT IN ITS APPLICATION HAS SUBMITTED THAT THIS AMOUNT IS INCLUDED IN THE I NTEREST RECEIVED ON LOAN SHOWN IN THE P&L ACCOUNT. HOWEVER, THE P&L ACCOUNT DOES N OT SHOW THE INTEREST RECOVERED AMOUNT OF RS. 89,20,750/-. SINCE, THERE I S NO MISTAKE APPARENT FROM RECORD, THEREFORE, THE APPELLANTS CONTENTION THAT THIS AMOUNT IS ALREADY INCLUDED IN INCOME IS NOT ACCEPTABLE. AS PER DOCUMENTS AVAIL ABLE ON THE RECORD THIS AMOUNT IS NOT REFLECTED AS INCOME IN THE P&L ACCOUN T. AS THE MISTAKE IS NOT APPARENT FROM THE RECORD, THEREFORE, THE APPELLANT S APPLICATION U/S 154 IS HEREBY REJECTED. 4. AGGRIEVED BY THE SAME THE ASSESSEE FILED THE PRE SENT APPEAL BEFORE US. 5. BEFORE US LD. LD. COUNSEL FOR THE ASSESSEE FOR T HE ASSESSEE REITERATED THE CONTENTIONS MADE BEFORE THE LD. CIT(A), AND STATED THAT THE LD. CIT(A), HAD MISUNDERSTOOD THE DETAIL OF OVERDUE INTEREST AMOUNT ING TO RS. 7,56,56,086/- SUBMITTED TO IT DURING APPELLATE PROCEEDINGS. LD. A R , REFERRING TO THE AFORESAID DETAIL, SUBMITTED THAT NEITHER HAD THE ASSESSEE CLA IMED THAT THE INTEREST RECOVERED DURING THE YEAR AMOUNTING TO RS. 89,29,75 0/- WAS NOT CREDITED TO THE P&L ACCOUNT NOR WAS IT POSSIBLE TO DO SO UNDER THE DOUBLE ENTRY SYSTEM FOLLOWED BY THE ASSESSEE. LD. AR EXPLAINED THAT AS PER THE D OUBLE ENTRY SYSTEM, ON 4 RECOVERY OF INTEREST, THE OVERDUE INTEREST ACCOUNT IS REVERSED, WHICH IS WHAT THE ASSESSEE ALSO DID, AS IS EVIDENT FROM THE DETAIL SU BMITTED AND BOOKED AS INTEREST INCOME OF THE ASSESSEE. LD. AR SUBMITTED THAT THE I MPUGNED SUM IN ANY CASE WAS NOT A PART OF THE OVERDUE INTEREST, WHICH WAS E VIDENT FROM THE DETAIL ALSO AND OBVIOUSLY THEREFORE IT WAS NOT IN DISPUTE BEFOR E THE LD. CIT(A). LD. CIT(A) HAS THEREFORE MADE AN APPARENT MISTAKE BY UPHOLDING ADD ITION OF THE SAME OUT OF THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF OVERD UE INTEREST. 6. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER O F THE CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS ALSO THE DOCUMENTS PLACED BEFO RE US. 8. THE ONLY ISSUE TO BE ADJUDICATED IS WHERE THE AD DITION OF RS. 89,20,750/- BEING OVERDUE INTEREST RECOVERED DURING THE YEAR, C ONSTITUTED A MISTAKE APPARENT FROM RECORD, NEEDING RECTIFICATION AS PER THE PROVISIONS OF SECTION 154 OF THE INCOME TAX ACT, 1961. 9. TO BEGIN WITH IT IS IMPERATIVE TO UNDERSTAND THE SCOPE OF SECTION 154 AS INTERPRETED BY VARIOUS COURTS. IN ORDER TO ATTRACT THE APPLICATION OF SECTION 154, IT MUST BE A CASE OF MISTAKE WHICH SHOULD BE GLARING AND MUST BE APPARENT FROM R ECORD. IN T.S BALRAM, ITO VS. VOLKART BROS & OTHERS (1971) 82 ITR 50 THE SUPREME COURT REITERATED THE LEGAL POSITION BY OBSERVING THAT A MISTAKE APPARENT ON RE CORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE E STABLISHED BY A LONG PROCESS OF REASONING ON POINTS ON WHICH THERE MAY B E CONCEIVABLY TWO OPINIONS AND HENCE A DEBATABLE ISSUE. 10. THE FACTS EMERGING IN THE PRESENT CASE IS THAT OVERDUE INTEREST AMOUNTING TO RS. 7,56,56,086/- WHICH WAS NOT CREDITED TO THE P&L ACCOUNT BY THE ASSESSEE BUT WAS SHOWN IN THE BALANCE SHEET, WAS TREATED AS INCOME OF THE ASSESSEE FOR 5 THE IMPUGNED YEAR BY THE ASSESSING OFFICER BY APPLY ING THE PRINCIPLE OF MERCANTILE SYSTEM OF ACCOUNTING. LD. CIT(A), IN APP ELLATE PROCEEDINGS, HELD THAT THE PROVISIONS OF SECTION 43D OF THE INCOME TAX ACT , 1961, R.W.R 6EA OF THE INCOME TAX RULES, 1962 APPLIED TO THE ASSESSEE AND THEREAFTER WORKED OUT THE ADDITION TO BE UPHELD AT RS. 1,15,81,916/- AS DETAI LED ABOVE. THE ASSESSES CASE IS THAT INCLUDING AN AMOUNT OF RS. 89,20,750/- BEING O VERDUE INTEREST RECOVERED DURING THE YEAR, IN THE ADDITION UPHELD, WAS A MIST AKE APPARENT FROM RECORDS REQUIRING RECTIFICATION OF THE ORDER OF THE LD. CIT (A). ON THE TOUCHSTONE OF THE PARAMETERS SET OUT BY JUDI CIAL DECISIONS, AS CITED ABOVE, RELATING TO IDENTIFICATION OF MISTAKE APPARE NT FROM RECORD IT HAS TO BE EXAMINED WHETHER THE CONTENTION OF THE ASSESSEE IS RIGHT OR NOT. 11. UNDENIABLY THE DISPUTE BEFORE THE LD. CIT(A) WA S RELATING TO THE ISSUE WHETHER OVERDUE INTEREST OF RS. 7,56,56,086/- WAS T O BE TAXED IN THE YEAR OR NOT. THE DETAIL OF THE OVERDUE INTEREST SUBMITTED TO THE CIT(A) AND WHICH ALSO IS NOT IS DISPUTE IS AS FOLLOWS: OVERDUE INTEREST AS ON 31.03.2009 RS. 5,74,58,78 1/- ADD: INTEREST FOR THE YEAR 2009-10 IN NPA ACCOUNTS RS. 2,56,05,301/- ADD: INTEREST FOR THE YEAR 2009-10 IN OTHER ACCOUNT S RS. 15,12,754/- TOTAL INTEREST ON OVERDUE ACCOUNT FOR THE YEAR 2009 -10 RS. 8,45,76,836/- LESS: RECOVERY OF OVERDUE INTEREST DURING THE YEAR 2009-10 RS. 89,20,750/- BALANCE OVERDUE INTEREST AS ON 31.03.2010 RS. 7, 56,56,086/- EVIDENTLY WHAT EMERGES FROM THE ABOVE DETAIL VIS-- VIS THE AMOUNT OF RS. 89,20,750/- IS THAT THE SAME WAS NOT PART OF THE OV ERDUE INTEREST AT ALL, HAVING BEEN RECORDED DURING THE YEAR AND THUS REDUCED WHIL E CALCULATING THE SAME. THEREFORE UNDOUBTEDLY RS. 89,20,750/- RELATIN G TO OVERDUE INTEREST RECOVERED DURING THE YEAR WAS NOT A PART OF THE OVE RDUE INTEREST OF RS. 7,56,56,086/- WHICH WAS IN DISPUTE BEFORE THE LD. C IT(A). HAVING SAID SO, WE 6 FIND THAT THE LD. CIT(A) UPHELD ADDITION OF RS. 1,1 5,81,916/- BY HOLDING THAT THE AMOUNT OF OVERDUE INTEREST TO BE BROUGHT TO TAX , BEING NOT SAVED BY THE PROVISION OF SECTION 43D OF THE ACT, WAS AS FOLLOWS : 1 INTEREST FOR THE YEAR 2009-10 ON OTHER ACCOUNTS NOT DECLARED AS NPA RS. 15,12,754/- 2 INTEREST RECEIVED DURING THE YEAR 2009-10 BUT NOT SHOWN IN THE P&L ACCOUNT RS. 89,20,750/- 3 INTEREST ON ACCOUNTS HAVING NPA DATE WITHIN 6 MONTHS FROM THE DATE OF SANCTION 8,74,086/- 4 INTEREST ON ACCOUNTS WHERE DATE OF NPA IS AFTER 31/03/2010 RS. 2,74,326/- TOTAL RS. 1,15,81,916/- 12. LD. CIT(A) WHILE CONFIRMING THE ADDITION HELD A T PARA 5.4 OF HIS ORDER AS FOLLOWS: 5.4 FURTHER, ON PERUSAL OF DETAILS OF OVERDUE INTER EST, IT IS NOTED THAT THE APPELLANT HAS COMPUTED OVERDUE INTEREST AS UNDER: OVERDUE INTEREST AS ON 31.03.2009 RS. 5,74,58,78 1/- ADD: INTEREST FOR THE YEAR 2009-10 IN NPA ACCOUNTS RS. 2,56,05,301/- ADD: INTEREST FOR THE YEAR 2009-10 IN OTHER ACCOUNT S RS. 15,12,754/- TOTAL INTEREST ON OVERDUE ACCOUNT FOR THE YEAR 2009 -10 RS. 8,45,76,836/- LESS: RECOVERY OF OVERDUE INTEREST DURING THE YEAR 2009-10 RS. 89,20,750/- BALANCE OVERDUE INTEREST AS ON 31.03.2010 RS. 7, 56,56,086/- BY ABOVE COMPUTATION, THE APPELLANT HAS INCLUDED OV ERDUE INTEREST OF RS. 15,27,754/- WHICH ARE ON ACCOUNTS NOT DECLARED AS NPA ACCOUNTS. FURTHER, THE APPELLANT HAS REDUCED THE RECOVERED INTEREST OF RS. 89,20,750/- D URING THE YEAR IN THE OVERDUE INTEREST ACCOUNT, THE BALANCE OF WHICH HAS BEEN SHO WN AS OVERDUE INTEREST IN THE BALANCE SHEET WITHOUT GIVING ANY EFFECT IN THE P&L ACCOUNT. ALTHOUGH, THE ACCOUNTS HAVE BEEN DECLARED AS NPA FALLING IN THE CATEGORY B AD AND DOUBTFUL DEBTS BUT THE RULE 6EA APPLICABLE TO THE PROVISIONS SECTION 43D P ROVIDES FOR SUCH INTEREST ON THE NON VIABLE OR STICKY ADVANCES FOR THE PERIOD OF SIX MONTH OR MORE AND THERE ARE NO MINIMUM PROSPECTS OF REGULARIZATION OF ACCOUNTS. HO WEVER, THE APPELLANT HAS DECLARED FEW ACCOUNTS WHERE THE NPA DATE IS WITHIN SIX MONTHS FROM THE DATE OF SANCTION. THE INTEREST PERTAINING TO SUCH ACCOUNTS OF RS. 8,74,086/- IS NOT IN ACCORDANCE WITH THE PROVISIONS OF RULE 6EA OF THE I .T. RULES. FURTHER, FEW ACCOUNTS HAVE BEEN DECLARED AS NPA WHICH IS BEYOND THE FINAN CIAL YEAR UNDER CONSIDERATION I.E. AFTER 31.03.2010. THE PROVISIONS OF SECTION 43 D PROVIDES THAT INTEREST IN RELATION TO SUCH CATEGORIES OF BAD AND DOUBTFUL DEBTS SHALL BE CHARGEABLE TO TAX IN THE YEAR IN WHICH IT IS CREDITED BY THE BANK IN ITS P&L ACCOUNT FOR THAT YEAR OR IN WHICH IT IS ACTUALLY RECEIVED BY THE BANK WHICHEVER IS EARLIER. THEREFORE, BY APPLYING THE PROVISIONS OF SECTION 43D READ WITH RULE 6EA , THE OVERDUE INTERESTS SHOWN BY THE APPELLANT ON BAD AND DOUBTFUL DEBTS DECLARED AS NPA BY FOLLOWING THE RBI GUIDELINES IS NOT CHARGEABLE TO TAX IN THE YEAR UND ER CONSIDERATION EXCEPT THE INTEREST ON FOLLOWING ACCOUNTS. 1 INTEREST FOR THE YEAR 2009-10 ON OTHER ACCOUNTS NOT DECLARED AS NPA RS. 15,12,754/- 2 INTEREST RECEIVED DURING THE YEAR 2009- 10 BUT NOT SHOWN IN THE P&L ACCOUNT RS. 89,20,750/- 3 INTEREST ON ACCOUNTS HAVING NPA DATE WITHIN 6 MONTHS FROM THE DATE OF SANCTION 8,74,086/- 7 4 INTEREST ON ACCOUNTS WHERE DATE OF NPA IS AFTER 31/03/2010 RS. 2,74,326/- TOTAL RS. 1,15,81,916/- IT IS OBVIOUS THAT THE LD. CIT(A) EXTRACTED THE FIG URE OF RS. 89,20,750/- FROM THE OVERDUE INTEREST OF RS. 7,56,56,086/- BUT AS STATED ABOVE, THE INTEREST RECOVERED WAS NOT A PART OVERDUE INTEREST AT ALL. T HEREFORE NO QUESTION AROSE OF UPHOLDING ADDITION OF THE SAME. IN OUR VIEW IT I S A CLEAR CASE OF MISTAKE APPARENT FROM RECORD, WHERE FIGURE WHICH HAS BEEN C LEARLY SHOWN TO BE NOT PART OF THE SUBJECT MATTER OF ADDITION IS STILL ADD ED BACK TO THE INCOME OF THE ASSESSEE. EVEN OTHERWISE WE FIND MERIT IN THE CONTE NTION OF THE LD. AR THAT ON ACCOUNT OF THE DOUBLE ENTRY SYSTEM OF ACCOUNTING, T HE OVERDUE INTEREST RECOVERED HAS TO BE SHOWN AS INCOME. WHEN ENTRY ON ACCOUNT OF OVERDUE INTEREST IS MADE THE SAME IS SHOWN BOTH AS AN ASSET AS WELL AS LIABILITY IN THE BALANCE SHEET AND NO AMOUNT IS REFLECTED IN THE P&L ACCOUNT. ON RECOVERY OF THE SAME THE EARLIER ENTRIES OF OVERDUE INTEREST ARE REVERSED AND BANK ACCOUNT IS DEBITED CREDITING THE INTEREST ACCOUNT, WHICH IS THEN REFLECTED IN THE P&L ACCOUNT. THEREFORE EVEN OTHERWISE THE OVERD UE INTEREST RECOVERED HAD BEEN CREDITED TO THE P&L ACCOUNT. MOREOVER THE LD. CIT(A) HAS HELD THAT THE ASSESSEE HIMSELF HAD ADMITTED THAT THE IMPUGNED SUM CONSTITUTED ITS INCOME BUT HAD NOT BEEN REFLECTED ITS P&L ACCOUNT. A PERUSAL OF THE DETAILS SUBMITTED BEFORE THE LD. CIT(A) DOES NOT LEND CREDENCE TO THIS UNDERSTANDING OF THE LD. CIT( A). WHAT EMERGES FROM THE DETAIL AND WHICH WOULD BE EVIDENT EVEN TO A LAY MAN IS THAT THE OVERDUE INTEREST RECOVERED WAS NOT PART OF THE OUTSTANDING OVERDUE INTEREST OF RS. 7,56,56,086/-. IT IS DEFINITELY NOT EMERGING FROM T HE DETAIL THAT THE ASSESSEE HAS NOT REFLECTED THE SAME IN ITS P&L ACCOUNT. THEREFORE IN VIEW OF THE FACT THAT THE OVERDUE INTE REST RECOVERED WAS NOT A PART OF OVERDUE INTEREST WHICH WAS THE SUBJECT MATT ER OF ADDITION THAT BUT 8 OBVIOUSLY THE OVERDUE INTEREST RECOVERED HAD TO BE SHOWN AS INCOME ON ACCOUNT OF THE DOUBLE ENTRY SYSTEM OF ACCOUNTING FO LLOWED BY THE ASSESSEE, AND FURTHER ON ACCOUNT OF THE FACT THAT THE ASSESSE E HAD NEVER CLAIMED THAT THE RECOVERED OVERDUE INTEREST WAS NOT INCLUDED IN THE P&L ACCOUNT THE ACTION OF THE LD. CIT(A) IN UPHOLDING ADDITION OF T HE SAME IS A MISTAKE EVIDENT FROM THE AVAILABLE RECORDS AND THEREFORE OU GHT TO BE RECTIFIED. 13. WE THEREFORE SET ASIDE THE ORDER OF THE LD. CIT (A) AND DELETE THE ADDITION OF RS. 89,20,750/- MADE ON ACCOUNT OF OVER DUE INTEREST RECOVERED. 14. THE APPEAL OF THE ASSESSEE IS THEREFORE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 16/06/2016. SD/- SD/- (H.L. KARWA) (ANNAPURNA GUPTA) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 16/06/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR