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TMI Blog2018 (5) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, the Division Bench in the case of CIT vs. Canfin Homes Limited (2011 (8) TMI 178 - KARNATAKA HIGH COURT ) on the basis of the interpretation given to Section 145 providing for “Method of Accounting” in the Act held that such interest income on bad debts/doubtful debt cannot be taxed, unless it is actually received or credited in the Profit and Loss Account of the assessee concerned in that year. - ITA NO.200014/2015 C/W ITA NOS.200016/2015, 200015/2015 AND 200013/2015 - - - Dated:- 23-3-2018 - Dr. VINEET KOTHARI AND MR. R. DEVDAS JJ. Appellants: (By Sri Ameet Kumar Deshpande, Advocate) Respondent (By Sri A Shankar and Sri M. Lava, Advocates) JUDGMENT VINEET KOTHARI J., 1. These four appeals filed by the Revenue are being disposed of by common order. The appeals pertain to Assessment Years 2009-10 and 2010-11 against the respondent-Assessee the Bijapur District Central Co-operative Bank Limited, Vijayapur. 2. Two issues which are sought to be raised by this Court, under Section 260A of the Income Tax Act in the form of substantial questions of law arising out of the order of the learned Income Tax Appellate Tribunal are as under. 3. That the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to its members. As this amendment is effective from the prospective date of 1st June, 2015, the co-operative bank shall be required to deduct tax from the payment of interest on time deposits of its members, on or after the 1st June, 2015. Hence, a cooperative bank was not required to deduct tax from the payment of interest on time deposits of its members paid or credited before 1st June, 2015. In view of the aforesaid Circular, this appeal does not survive for consideration and is accordingly dismissed. No costs. 3. In view of the same, the present appeal filed by Revenue is also disposed of, in the same terms. 7. In view of the aforesaid reasons of this Court and Ministry s Instructions, we do not find any substantial question of law to be arising for our consideration of the present appeals filed by the Revenue on the said issue. 8. On another issue raised by the Revenue in the present appeals about the taxability of the interest on the bad debts/doubtful debts or NPA (Non- Performing Assets) by the respondent-Co-operative Bank, without such interest being actually credited in the Profit and Loss Account of the respondent-Assessee, in the books of accounts for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of income of public financial institutions, etc.- Notwithstanding anything to the contrary contained in any other provision of this Act, in the case of a public financial institution or a scheduled bank or a State financial corporation or a State industrial investment corporation, the income by way of interest in relation to such categories of bad or doubtful debts as may be prescribed having regard to the guidelines issued by the Reserve Bank of India in relation to such debts, shall be chargeable to tax in the previous year in which it is credited by the public financial institution or the scheduled bank or the State financial corporation or the State industrial investment corporation to its profit and loss account for that year or, as the case may be, in which it is actually received by that institution or bank or corporation, whichever is earlier. Explanation .-For the purposes of this section,- (a) public financial institution shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956); (b) scheduled bank shall have the meaning assigned to it in clause (ii) of the Explanation to clause (viia) of sub-section (1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1956 (1 of 1956); (ii) whose main object is carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes; and (iii) which is registered in accordance with the Housing Finance Companies (NHB) Directions, 1989, given under section 30 and section 31 of the National Housing Bank Act, 1987 (53 of 1987); (c) public financial institution shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956); (d) scheduled bank shall have the meaning assigned to it in clause (ii) of the Explanation to clause (viia) of sub-section (1) of section 36; (e) State financial corporation means a financial corporation established under section 3 or section 3A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951); (f) State industrial investment corporation means a Government company within the meaning of section 617 of the Companies Act, 1956 (1 of 1956), engaged in the business of providing long-term finance for industrial projects]. (g) co-operative bank , primary agricultural credit society and primary co-ope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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