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TMI Blog2014 (12) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT Act - Since the appeal of the assessee has been decided on merits, considering the material and evidences on record in the light of submissions of the parties, therefore, review of the judgment is not permissible – Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 1,94,00,000/- is disallowable. Accordingly, the appeal of the appellant is dismissed on this issue." 4. The submissions of both the parties before the Tribunal are reproduced as under : "3. The ld. counsel for the assessee reiterated the submissions made before the authorities below and referred to PB-36, which is profit and loss account ending year 31.03.2009 to show that interest overdue was not received which is taken as "Kaalateet Byaz Kosh". He has submitted that this figure was taken to balance sheet under the head "Interest Receivable"(PB-31). He has referred to PB-11, which is audit report, in which method of accounting employed by the assessee was mercantile system except in the case of interest on NPA advances on cash basis as per RBI guidelines. He has referred to PB-46 to show that in the assessment year under consideration, interest of 1.94 crore was received lesser, which is taken into interest receivable account and was carried forward to the next year. He has also relied upon the decision of Hon'ble Supreme Court in the case of UCO bank vs. CIT, 237 ITR 889, in which the assessee followed mixed method of accounting and for interest on doubtful loans has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the ld. CIT(A) according to the above provision. However, for provision for penal interest in a sum of ₹ 1.94 crores, the assessee has not made any claim for deduction either u/s. 36(1)(vii) or u/s. 36(1)(viia) of the IT Act. The assessee claimed that such claim is allowable as per guidelines issued by RBI as noted above. NPA accounts are accounts of defaulters if they do not pay or no chance to pay. Entries made by assessee on accrual of penal interest appears to be made on mercantile system of accounting but later on claimed deduction in P & L account on cash basis cannot be held to be justified. Once income accrued, it has to be taxed. Both method cannot operate together. The above RBI guidelines have been issued for administrative purpose for regulating the banking business to monitor NPA A/c. It has nothing to do with the deduction claimed either u/s. 36(1)(vii) or sec. 36(1)(viia) of the IT Act. The ld. DR also relied upon the decision of Madras High Court in the case of T.N. Power Finance and Infrastructure Development Corporation Ltd. (supra) in which also it was held that Reserve Bank directives cannot override the statutory provisions. Hon'ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , whose recovery was doubtful and which has not been recovered by the assessee bank for last three years, but has been kept in suspense account was held not includible in the income of the assessee. However, the appeal of the assessee under consideration pertains to assessment year 2009-10 and there is amendment in section 145 of the IT Act w.e.f. 01.04.1997 as substituted by Finance Act, 1995 and it has been provided that income chargeable under the head 'profit and gains of business and profession' or 'income from other sources' shall subject to provisions of sub-section (2), be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. It appears from the facts and circumstances of the case that the assessee earlier showed the penal interest as income arising on accrual basis, but later on the assessee made provision for doubtful penal interest in the profit and loss account without any justification. There was no basis for the assessee to claim deduction in the profit and loss account by considering the same as provision for penal interest. The assessee has also not made out any case before the authorities below as to under wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Hon'ble M.P. High Court in the case of Agarwal Warehousing, 257 ITR 235 (MP) and of Hon'ble Madras High Court in the case of CIT vs. Adyar Gate Hotel Ltd., 294 ITR 155 in which Hon'ble Madras High Court also held that the miscellaneous application should not be considered on the debatable issue. Hon'ble Calcutta High Court in the case of Hindustan Lever Ltd. 284 ITR 42 held that the mistake must be so obvious that it can be easily corrected to wit any arithmetical mistake, wrong quotation of section etc. and not on debatable issues. Considering the facts of the case in the light of the above decisions, it is clear that the Tribunal has no power to review their own orders already passed on merits. In this case whatever points have been raised in MA have been considered and the decision of the Supreme Court in the case of UCO Bank, 237 ITR 889, which is also referred in miscellaneous application, has been considered in the light of relevant provisions of law. Whatever submissions were raised by the ld. counsel for the assessee, have been dealt with and the appeal of the assessee was dismissed. Therefore, there is no mistake apparent on record of the Tribunal. Whatever dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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