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TMI Blog2011 (9) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... d to disregard that the interest irrecoverable, which is embedded in the NPAs is nothing but interest receivable from members, though not regularly received. It is only the defaulted interest income, which is sought to be claimed as a deduction. If the said deduction is not allowed, the natural corollary is that the enhanced income would become eligible for 80P(2)(a)(i), to which the assessee is otherwise entitled. Addition made on account of disallowance u/s 14A - Held that:- The assessee had not claimed any exemption under the provisions of section 10(38) of the Act i.e. in connection with the income which is exempt in the hands of the assessee. The deduction was claimed under chapter VIA of the Income Tax Act which had been allowed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared for the assessee and put forth their contentions. The Ld. DR for the Revenue placed reliance on the order of Assessing Officer. The Ld. Counsel for the assessee pointed that the issues raised above are covered by the order of the Tribunal in the case of assessee itself relating to assessment year 2007-08. 4. We have heard the rival contentions and perused the records. We find that the similar issues as raised vide ground Nos. 1 to 3 were raised in the case of assessee itself in ITA No. 1113/Chd/2010 relating to assessment year 2007-08 and the Tribunal vide its order dated 9.2.2010 in turn relying on its earlier order in ITA No. 435/Chandi/2009 relating to assessment year 2006-07 (order dated 24.9.2009) in the casae of assessee itself, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to ₹ 74,19,803/-. On this aspect also, in view of the precedent dated 25.3.2009 (supra), wherein the following discussion has been made, the order of the CIT(Appeals) deserves to be affirmed :- "14. The third income relates to interest income on reserve funds amounting to ₹ 3,98,94,432/-. The Assessing Officer disallowed the claim on the plea that the said interest income was not earned from the providing of credit facilities to the members. The income in question was earned on surplus funds kept by the assessee in the banks to earn income. The CIT(Appeals) has allowed the claim of the assessee on the ground that the interest invested out of reserve funds is to be treated as from an activity attributable to the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch deposits, in our considered opinion, can be said to be attributable to the business of providing credit facilities, so as to fall within Section 80P(2)(a)(i) of the Act. In our view, CIT(Appeals) made no mistake on this score also. Hence, on this Ground, the Revenue has to fail." 8. Respectfully concurring with the aforesaid precedent, decision of the CIT(Appeals) is upheld and Revenue fails on this aspect also. 6. The issue raised in the present ground is identical to the issue raised before Tribunal in earlier year. Accordingly, following the earlier order of the Tribunal (supra) in assessee's own case, we dismiss the ground of appeal No. 1 raised by the Revenue. 7. The issue raised by the Revenue in ground No. 2 is against the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a claim could only be allowed if the assessee was engaged in a business of banking. Since, it was held that assessee was not engaged in the banking business, the claim was denied. In appeal, the CIT(Appeals) held that though the Assessing Officer was justified in disallowing the said claim, but the consequential increase in income would result in a higher claim of deduction u/s 80P(2)(a)(i) of the Act. Against such decision, the Revenue is in appeal. "13. In our considered opinion, the disallowance of the provision for NPA has been sustained by the CIT(Appeals), but evidently, the income resulting thereof has been held to be eligible for 80P(2)(a)(i) of the Act. On this aspect, we find no justification for the Ground raised by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 14A of the Act. The Ld. AR also pointed out that the said claim of the assessee had been allowed by Assessing Officer under the provisions of section 80P(2)(d) and there is no claim of exemption under the provisions of section 10(38) and hence provisions of section 14A are not applicable. The CIT(A) deleted the addition vide para 5.3 of his order. 10. We have heard the rival contentions and perused the records. The assessee had not claimed any exemption under the provisions of section 10(38) of the Act i.e. in connection with the income which is exempt in the hands of the assessee. The deduction was claimed under chapter VIA of the Income Tax Act which had been allowed by the Assessing Officer while computing the income for the year u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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