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TMI Blog2019 (2) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... ntical issue was also examined in case of Pr. CIT v/s. Ludhiana Central Coop. Bank Ltd [2018 (11) TMI 442 - PUNJAB AND HARYANA HIGH COURT] a held that tribunal while relying upon the various pronouncements had decided the issue regarding taxability of interest on NPA in favour of the assessee as being taxable in the year of receipt. The deletion made by the CIT(A) on account of addition regarding interest accrued on NPA. No illegality or perversity could be demonstrated by learned counsel for the Revenue in the aforesaid findings recorded by the Tribunal. Section 43D essentially provides for charging of interest on actual basis in case of certain special circumstances, in the hands of the public financial institutions, public companies e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal erred in law in failing to appreciate the fact that the assessee is a cooperative bank and not a scheduled bank and that the provisions of section 43D are applicable to the financial institutions and not to cooperative societies? 3. Respondent-Assessee is a Cooperative Bank. The Bank had filed return of income for the Assessment Year 200910 on 31st March, 2011, declaring loss of ₹ 34.11 Crores (rounded of). During the assessment of the return, the Assessing Officer noticed that the Assessee-Bank had transferred an amount of ₹ 7.80 Crores (rounded of) to Overdue Interest Reserve (OIR) by debiting the interest received in Profit and Loss Account. The Assessing Officer was of the opinion that, Assessee-Bank had t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue was discussed at length. The Tribunal broadly relied upon the principle of real income theory and referred to the decision of the Supreme Court in case of CIT v/s. Shoorji Vallabahdas Co., reported in 46 ITR 144 . Thereupon, the Revenue has preferred this appeal. 5. Having heard the learned Counsel for the parties, we notice that the issue is squarely covered by the judgments of Gujarat High Court and Punjab Haryana High Courts. The Gujarat High Court in case of Pr. CIT v/s. Shri Mahila Sewa Sahakari Bank Ltd., reported in 395 ITR 324 had undertaken the detailed exercises to examine an identical situation. The Court held that, the Cooperative Banks were acting under the directives of the Reserve Bank of India with regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding interest accrued on NPA. No illegality or perversity could be demonstrated by learned counsel for the Revenue in the aforesaid findings recorded by the Tribunal. 7. The issue is thus, covered by the decisions of two High Courts as noted above wherein identical situation came up for consideration. Against the judgment of the Gujarat High Court, the appeals have been dismissed by the Supreme Court. Thus, the Supreme Court can be seen to have approved the decision of the Gujarat High Court in case of Shri Mahila Sewa Sahakari Bank Ltd., (supra). We, therefore, do not see any reason to entertain these Appeals, since no question of law can be stated to have arisen. For the reference, we also notice that subsequently, legislat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or actually received, whichever is earlier. This provision is an exception to the accrual system of accounting which is regularly followed by such assessee for computation of total income. The benefit of this provision is presently available to scheduled banks, public financial institutions, state financial corporations, State industrial investment corporations and certain public companies like Housing Finance companies. With a view to provide a level playing filed to cooperative banks vis-a-vis scheduled banks and to rationalize the scope of section 43D, it is proposed to amend section 43D of the Act so as to include cooperative banks other than a primary agricultural credit society or a primary cooperative agricultural and rural de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ryana High Court and the fact that the Supreme Court has dismissed the Appeals against the judgment of the Gujarat High Court, was not before the Court at the time of admission of Appeals. 9. We notice that in Income Tax Appeal No. 1003 of 2016, the Revenue has pressed one more question which reads as under: Whether on the facts and in the circumstances of the case the amortized premium on investment in Govt. Securities held under the category Held to Maturity (HTM) can be allowed as revenue expenditure? 10. Counsel for the Revenue, however, very fairly points out that such a question came to be dismissed by the Division Bench of this Court by order dated 17th March, 2015 passed in Writ Petition No.1117 of 2013. 11. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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