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TMI Blog2017 (11) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the Income Tax Appellate Tribunal dated 07.04.2017. Since other Tax Appeals have been admitted, we ADMIT this Tax Appeal also for consideration of following substantial question of law. "[A] Whether the ITAT has erred in law in deleting the addition made by the Assessing Officer u/s. 36(1)(viia) of the the Income Tax Act ?" Learned advocate Shri Darshan Patel appeared for the respondent and waived service of notice of admission. 2. Respondent assessee is a cooperative bank. For the assessment year 2010-11, the assessee had filed the return of income on 14.10.2010 declaring total loss of Rs. 3.22 crores (rounded off). The return was taken in scrutiny. During such scrutiny assessment, one of the issues examined by the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the opinion that the assessee's case would be governed under section 36(1)(viia) of the Act. Within the parameters of such provisions, the deduction cannot be granted. The RBI directives cannot govern the taxability of the income. Primarily on such grounds, the Assessing Officer added back the said sum of Rs. 93.03 lakhs which was claimed by way of deduction by the assessee by way of provision for overdue interest. 4. The assessee carried the matter in appeal. Commissioner of Income Tax (Appeals) allowed the appeal. He relied on the decision of Income Tax Appellate Tribunal and of the Bombay High Court in case of Commissioner of Income Tax v. Vasisth Chay Vyapar Ltd. reported in [2011] 330 ITR 440. 5. The Revenue carried the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, the same cannot be taxed even though the possibility of recovering interest was almost nonexistent. Learned advocate submitted that various Courts have taken a similar view and granted the deduction on the principal of taxing real income. Our attention was drawn to the decision of Division Bench of this Court in case of Principal Commissioner of Incometax5 v. Shri Mahila Sewa Sahakari Bank Ltd. reported in [2016] 72 taxmann.com 117 (Gujarat) in which the said issue came up for consideration. 8. In our opinion, entire issue is covered by the judgment of this Court in case of Shri Mahila Sewa Sahakari Bank Ltd. (supra). In the said case, the Court has considered following substantial question of law: "Whether on the facts and in the cir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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