DCIT Circle- 4(2), New Delhi V. Bhartiya Samruddhi Finance Ltd., New Delhi

ITA 7158/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9601 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 28-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 145; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. NARENDER KUMAR CHOUDHARY, JUDICIAL MEMBER ITA No. 7158/Del/2019 (Assessment Year : 2013-14) DCIT Circle – 4(2) New Delhi PAN No. AAACB 5337 Q Vs. Bhartiya Samruddhi Finance Ltd., F-5, Ground Floor, Greater Kailash Enclave, Part-I, New Delhi – 110 048 (APPELLANT) (RESPONDENT) Assessee by --None-- Revenue by Shri Kanav Bali, Sr. D.R. Date of hearing: 29.09.2022 Date of Pronouncement: 30.09.2022 ORDER PER ANIL CHATURVEDI, AM: This appeal filed by the Revenue is directed against the order dated 10.06.2019 passed by the Commissioner of Income Tax (Appeals)-13, New Delhi relating to Assessment Year 2013-14. 2. Brief facts of the case as culled out from the material on record are as under:- 2 3. Assessee is a Non Banking Finance Company (NBFC) and is stated to be engaged in the business of providing micro credit to rural customers in India. Assessee filed its return of income for A.Y. 2013-14 on 28.09.2013 declaring loss of Rs.35,67,81,475/-. The case was selected for scrutiny and thereafter, assessment was framed u/s 143(3) of the Act vide order dated 22.03.2016 and the total income was determined at Rs.83,39,753/-. 4. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 10.06.2019 in Appeal No.16/18-19 granted substantial relief to the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds: “1. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) is right in not treating the interest derecognized on NPA as income of the assessee company on accrual basis even though the assessee company is following the mercantile system of accounting as per the provisions of section 145 of the IT Act, 1961. 2. The appeallant craves leave for reserving the right of amend, modify, alter add or forgo any ground(s) of appeal at any time before or during the hearing of this appeal.” 5. On the date of hearing none appeared on behalf of the assessee nor any adjournment application was filed despite the fact that the notice of hearing was issued to the assessee. Since 3 the issue raised in the appeal of the Revenue appears to be a covered issue in favour of the assessee, we therefore, proceed to dispose of the appeal ex parte qua the assessee, after considering the submissions of Learned DR and the material on record 6. During the course of assessment proceedings, assessee was asked to submit the details in respect of de-recognition of interest income and was also show-caused as to why the interest income on Non-performing loans amounting to Rs.36,51,19,893/- not be considered as income. To the aforesaid query of AO assessee made detailed submissions which was not found acceptable to AO. AO noted that identical disallowances were made in assessee’s own case in A.Y. 2009-10, 2010-11, 2011-12 & 2012- 13 and further the High Court decision in assessee’s own case for A.Y. 2005-06, 2007-08 and 2008-09 was not acceptable to the Revenue on merits. AO thereafter by placing reliance on the decision of Hon’ble Apex Court in the case of Southern Technologies Ltd. held the derecognized interest amounting to Rs.36,51,19,893/- as income of the assessee and made its addition. 7. Aggrieved by the order of AO, assessee carried the matter before CIT(A). CIT(A) while deciding the issue noted that identical issue arose in assessee’s own case for A.Ys. 2004-05 to 2008-09, 2009-10 wherein the Hon’ble ITAT has decided the issue in favour 4 of the assessee and on a reference by the Department to Hon’ble High Court, the same was dismissed. He thus decided the issue in favour of the assessee. CIT(A) also noted that the Tribunal for A.Ys. 2011-12 & 2012-13 vide order dated 08.04.2019 has decided the issue in favour of the assessee. He therefore, by following the decision of Hon’ble Delhi High Court and the Tribunal in the case of the assessee itself which are noted by CIT(A) in his order deleted the addition. Aggrieved by the order of CIT(A), Revenue is now before us. 8. Before us, Learned DR supported the order of lower authorities. 9. We have heard the Learned DR and perused the material available on record. The issue in the present ground is with respect to the addition made by derecognizing interest accrued on Non Performing Assets. We find that CIT(A) while deleting the addition has noted that on identical facts in earlier years the issue has been decided in favour of the assessee and further for A.Y. 2004-05 to 2008-09, 2009-10, the reference was made by the Department against the order of Tribunal but the reference was dismissed by Hon’ble High Court. Before us, Revenue has not placed any material on record to demonstrate that the decision of Hon’ble High Court and the decision of Tribunal in assessee’s own case has been stayed/set aside/overruled by higher judicial 5 forum. We, therefore, find no reason to interfere with the order of CIT(A). Thus, the ground of the Revenue are dismissed. 10. In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 30.09.2022 Sd/- Sd/- (NARENDER KUMAR CHOUDHARY) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 30.09.2022 PY* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI