2019 (4) TMI 2089 - AT - Income Tax

Disallowance on account of derecognized interest - CIT-A deleted the addition - HELD THAT - After perusing the aforesaid order of the Hon ble High Court of Delhi 2014 (5) TMI 1225 - DELHI HIGH COURT we note that the issue in dispute has been decided in favour of the assessee and therefore, Ld. CIT(A) has observed that since the issue has been decided in earlier years in favour of the assessee in its own case by the Hon ble High Court, the addition to income on this account made in the impugned order was rightly deleted. Hence, in our considered opinion there is no illegality or infirmity in the finding of the Ld. CIT(A) on the issues in dispute, therefore, we uphold the action of the Ld. CIT(A) on the issues in dispute and reject the grounds raised by the Revenue.

Summary

Issues Involved:
Appeal against deletion of disallowance of interest income on Non Performing Assets (NPA) in assessment years 2011-12 & 2012-13.

Analysis:
1. The Revenue filed appeals against the Orders of the Ld. CIT(A)-2, New Delhi for assessment years 2011-12 & 2012-13. The appeals were heard together due to common issues. The primary issue was the disallowance of Rs. 2,39,93,102/- on account of derecognized interest income.
2. The assessee had declared income under the normal provisions and MAT provisions of the Income Tax Act, 1961. The Assessing Officer (AO) disallowed the interest income derecognition amount based on past assessments and legal provisions. The AO added the disallowed amount to the total income of the assessee.
3. The Ld. CIT(A) partly allowed the appeal and deleted the disallowance of interest income. The Revenue contested this decision before the Tribunal, while the assessee relied on a High Court decision favoring the assessee on a similar issue.
4. The Tribunal noted that the issue had been decided in favor of the assessee in previous years by the High Court. Referring to the High Court's decision, the Tribunal upheld the Ld. CIT(A)'s order, stating there was no illegality or infirmity in the decision. Consequently, the Tribunal dismissed the Revenue's appeals.
5. The Tribunal's decision was based on the precedent set by the High Court's judgment, which favored the assessee regarding the derecognition of interest income on Non Performing Assets. The Tribunal's ruling aligned with the legal principles established in previous cases, resulting in the dismissal of the Revenue's appeals.
6. The Tribunal's detailed analysis of the legal precedents and the specific circumstances of the case led to the conclusion that the disallowance of interest income was not justified. By upholding the Ld. CIT(A)'s decision, the Tribunal ensured consistency with the legal framework and past judicial interpretations, ultimately favoring the assessee in this matter.