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TMI Blog2021 (5) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.11.2018 with the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside findings of the assessing authority in respect of the provisions for NPA's debited to P & L Account for A.Y.2010-11 by following the decision of Apex Court in case of UCO Bank Ltd v/s CIT (reported in 237 ITR page 889)? 2. Facts leading to filing of this appeal briefly stated are that the assessee is a co-operative bank. The co3 operative Banks became taxable entity like the commercial banks from the Assessment Year 2007-08. The assessee therefore, filed the return of income for the Assessment Year 2010-11. 3. At the time of hearing, the learned counsel appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and the same is in contravention of the law laid down by the Supreme Court in CATHOLIC SYRIAN BANK LTD. VS. CIT (SC) 343 ITR 270. It is further submitted that the principle laid down in the aforesaid decision has not been taken note of by the tribunal and therefore, the matter requires re consideration. It is also urged that reliance placed on decision of this court in COMMISSIONER OF INCOME-TAX VS. CANFIN HOMES LTD., 347 ITR 382 is of no assistance to the assessee as in the aforesaid decision, the effect of Section 36(1)(viia) of the Act has not been considered. 6. On the other hand, learned counsel for the assessee submitted that tribunal was justified in holding that accounting interest income on non performing asset on cash basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 36(1)(viia) of the Act in the light of the decision of the Supreme Court in UCO Bank Ltd. supra. The tribunal in its order dated 10.10.2014 inter alia has held that though the assessee has used the nomenclature as provision for non performing assets but in pith and substance, the provision has been created for bad and doubtful debts and in doing so the assessee has followed the guidelines framed by Reserve Bank of India. The tribunal has therefore, affirmed the finding recorded by the Commissioner of Income Tax (Appeals). 8. This court in Canfin Homes Ltd. supra after taking note of Section 145 of the Act has held that once a particular asset is shown as non performing asset then the assumption that it is not yielding any revenue. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2015 (SC) and 'UCO BANK VS. CIT', 360 ITR 567 (KOL). 6. We have considered the submissions made by learned counsel for the parties and have perused the record. In the course of assessment proceedings, it was noticed that assessee had debited Rs. 1.5 Crores as provision for non performing asset but in the income computation sheet the same has not been added. The assessee was given an opportunity to explain why non performing asset provision has not added back to the total income, in the income computation sheet and again deduction 7.5% under Section 36(1)(viia) has not been claimed. The assessee thereupon submitted that a provision has been made as per the norms of the Reserve Bank of India and the details of non performing assets ..... X X X X Extracts X X X X X X X X Extracts X X X X
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