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TMI Blog2020 (10) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Assessee has opted for settlement of the dispute under Vivad Se Vishwas Act, 2020 - Since the assessee has opted to settle the dispute under Direct Tax Vivad Se Vishwas Act, 2020, the assessee would be moving application for withdrawing the present appeal filed before the Tribunal in due course - no purpose will be served in keeping the appeal of the assessee pending. Accordingly, we dismiss the appeal of the assessee as withdrawn. The assessee seeks adjournment only for the reason that it has not received Form No.3, meaning thereby, the assessee wants to ensure that there is no difference in the tax amount payable by it. However, since we have dismissed the appeal of the assessee, it is given liberty to move appropriate application for recall of the present order in accordance with law, if the assessee intends to do so. - ITA No.2120/Bang/2018, ITA No.1937/Bang/2018 - - - Dated:- 29-9-2020 - Shri N.V. Vasudevan, Vice President And Shri B.R. Baskaran, Accoutant Member For the Appellant : Shri Suresh Muthukrishnan, A.R. For the Respondent : Smt. R. Premi, D.R. ORDER PER B.R. BASKARAN, ACCOUNTANT MEMBER: These cross appeals are directed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT Vs. Canfin Homes Ltd. 347 ITR 382 that the interest from nonperforming assets is not assessable as income. Following the same, the Ld. CIT(A) deleted the addition of interest income relating to NPA assets. The Ld. CIT(A), however, confirmed that the addition of interest income accrued on standard assets disallowance made u/s 40(a)(ia) of the Act and u/s 37(2B) of the Act. 8. Aggrieved, both the parties are in appeal before us challenging the decision rendered by Ld. CIT(A) against each of them. 9. We shall first take up the appeal filed by the revenue. The Ld. A.R. submitted that the A.O. had made identical addition in respect of income accrued on non-performing assets in assessment years 2009-10 and 2010-11 also. The coordinate bench of ITAT, vide its order dated 28-09-2017 passed in ITA nos.1522 1523/Bang/2016 has held that interest income on non-performing assets is not assessable as income of the assessee. In this regard, the coordinate bench has followed the decision rendered by the jurisdictional High Court in the case of Canfin Homes Ltd. (supra) and also in the case of Siddeshwar Co-operative Bank Ltd. reported in 388 ITR 588. 10. On the contrary, the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular income as accruing, whether that amount is really accrued or not is liable to bring the said income to tax. His accounts should reflect true and correct statement of affairs. Merely because the said amount accrued was not realised immediately cannot be a ground to avoid payment of tax. But, if in his account it is clearly stated though a particular income is due to him but it is not possible to recover the same, then it cannot be said to have been accrued and the said amount cannot be brought to tax. In the instant case, we are concerned with a non-performing asset. As the definition of non-performing asset shows an asset becomes non-performing when it ceases to yield income. Non-performing asset is an asset in respect of which interest has remained unpaid and has become past due. Once a particular asset is shown to be a non-performing asset, then the assumption is-it is not yielding any revenue. When it is not yielding any revenue, the question of showing that revenue and paying tax would not arise. As is clear from the policy guidelines issued by the National Housing Bank, the income from non-performing asset should be recognised only when it is actually received. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) the instalment of principal or interest thereon remains overdue for one crop seasons for long duration crops. Banks should, classify an account as NPA only if the interest charged during any quarter is not serviced fully within 90 days from the end of the quarter.' Further, asset classification which is separately dealt with reference to categories of non-performing assets, as follows: Banks are required to classify non-performing assets further into the following three categories based on the period for which the asset has remained nonperforming and the realisability of the dues: (a) Sub-standard Assets (b) Doubtful Assets (c) Loss Assets Therefore, it is evident that the mere nomenclature adopted with reference to the bad loans and advances receivable, would refer to all non-performing assets of any nature, of whatever category it was placed as a non-performing asset and therefore, the decision of this court in Canfin Homes Ltd.'s case (supra) would squarely apply. Accordingly, the above question of law also stands answered. Accordingly, the appeals stand disposed of. Accordingly, in view of the binding precedent of the Hon'ble jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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