2024 (11) TMI 1394 - SCH - Income Tax

Claim for deduction on account of the method for determining an NPA - entitlement to deduction on account of de-recognition of interest accruing upon NPAs applying Rule 6EB of the Income Tax Rules, 1962 - directions issued by the National Housing Bank under Section 30A read with 36 of the National Housing Bank Act, 1987 - As decided by HC 2017 (7) TMI 144 - DELHI HIGH COURT Section 43D of the Act read with Rule 6EB is a complete Code in itself. There is an element of discretion for the rule making authority to follow or not to follow the NHB guidelines as and when they are revised. The purpose of classification of debts as NPA by the NHB and the purpose for non-recognition of income for the purposes of the Act are different. Given the wording of the relevant provisions of the Act and the NHB Act, it is not possible to agree to HUDCO's proposition that with every change in the NHB guidelines there would be a corresponding automatic change in Rule 6EB. Even otherwise, as pointed out by the ITAT, the real income principle would have no application as far as Section 43D of the Act. A distinction is required to be drawn between the concept of 'deductions' claimed under the Act which has to satisfy the conditions laid down therein to qualify as such and the prudential norms that the NHB Act may lay down for determining an NPA. HELD THAT - Having heard the learned counsel appearing for the petitioner and having gone through the materials on record, we see no reason to interfere with the impugned orders passed by the High Court. The Special Leave Petitions are, accordingly, dismissed. Interim relief earlier granted by this Court vide Order dated 6-8-2018 stands vacated forthwith.

Summary

The Supreme Court dismissed the Special Leave Petitions and upheld the orders passed by the High Court. The interim relief granted earlier was vacated, and any pending applications were disposed of.