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TMI Blog2024 (12) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... and doubtful debts shall be chargeable to tax as per guidelines of Reserve Bank of India. The said provision has been made applicable to Co operative Bank from the assessment year 2017 18. However, since the same is a beneficial provision, the same may be permitted to apply retrospectively. The provision is a non abstante one and hence has an overriding effect upon section 145 of the Act. Appeal filed by the revenue is dismissed. - Shri V. Durga Rao, Judicial Member And Shri K.M. Roy, Accountant, Member For the Assessee : Shri Manoj G. Moryani For the Revenue : Shri Sandipkumar Salunke ORDER PER K.M. ROY, A.M. This appeal by the Revenue is directed against the impugned order dated 02/09/2020, passed by the learned Commissioner of Income Tax (Appeals) 1, Nagpur, [ learned CIT(A) ], for the assessment year 2011 12. 2. The Revenue has raised following grounds: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of the provision claimed of overdue interest amounting to Rs. 2,91,38,000/- without appreciating the facts of the case. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest on NPA accounts has been allowed by the Hon. ITAT Nagpur Bench in favour of this assessee. Appellant humbly submits that this ground under appeal is squarely covered by Hon. ITAT judgment which was passed on 06.03.2018 in appellant own case. Submission dated 19/08/2020 In respect of the issue of Rs. 18060000/- for A.Y. 10-11, the Honourable Tribunal vide order no. 127/NAG/2015, 128/Nag/2015 135/Nag/2015 dated 06.03.2018 has mentioned as under : Per Bench-ITA No. 127/Nag/2018-the first issue is this appeal of the assessee is against the order No. CIT(A)-1/311/2013-14 of learned CIT(A)-1, Nagpur dated 27.01.2015 rejecting the claim of deduction respect of reversal of NPA interest credited to Profit and Loss account. For This, the assessee has raised following ground :- 01. The learned Commissioner of Income Tax (Appeals)-1 erred in rejecting the claim of deduction in the computation of income in respect of reversal of NPA interest credited to profit and loss account Para no. 3 read as under :- Aggrieved the assessee preferred the appeal before the CIT(A). Learned CIT(A) rejected the claim of deduction in computation of income is respect of reversal of NPA interest credited to P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years. Appellant further submits that in A.Y. 2008-09 the overdue interest provision on NPA was added to the income at Rs. 111733000/-. As against this in A.Y. 2009-10 reversal of overdue interest provision on NPA was at Rs. 38040000/-, in A.Y. 2010-11 it was at Rs. 18060000/- and in A.Y. 11-12 it was at Rs. 29138000/-. Thus the total of reversal comes to Rs. 85238000/- as against overdue interest provision of Rs. 111733000/-. Thus the reversal is must less than Rs. 111733000/-. In view of this it is submitted that the amount of Rs. 111733000/- has been assessed in A.Y. 2008-09 and the amount of Rs. 38040000/- for A.y. 2009-10 and 29138000 for A.Y. 11-12 has been assessed, which amounts to double assessment of the overdue interest provision. Once on debiting in the profit loss account for A.Y. 2008-09 and again on crediting in the Profit Loss account ofr A.Y. 2009-10, 11-12. Therefore your honor is humbly requested to delete the addition of Rs. 29138000/- in A.Y. 11-12. Submission dated 04/08/2020 Appellant had already filed submission and paper book on 18.08.2017 and 24/10/2018, appellant further submits as under : Regarding ground No.01:- Overdue interest provision on NPA account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er:- 7. In view of the above details, we are convinced that the assessee's claim is a bonafide and the amount which has been reversed and debited to the P L A/c for A.Y. 211-12 has already been added in the computation of income because the assessee has already claimed the same in the computation of income for A. . 2010- 11 ie. year under consideration. In view of these facts, we allow the claim of the assessee and this issue of assessee's appeal is allowed. 5.6.4 In view of the decision of the Hon'ble ITAT in the above referred cases, the contention of the appellant that the amount of Rs. 11,17,33,000/-, which was debited for AY 2008-09 to the P L a/c on account of overdue interest provision on NPA account but was disallowed in the assessment, was the origin point of the present issue. Therefore, as held by Hon'ble ITAT the reversal out of the overdue interest provision on NPA account, being eligible for deduction from the total income, the amount of Rs. 2,91,38,000/- for AY 2011-12, as discussed in the table preceding para 5.6.1 is held to be allowable. Accordingly, the AO is direct to delete the addition made on this account. Thus, Ground No.1 stands allowed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the Uco Bank's Case (supra) was also referred and the Hon'ble Apex Court has allowed the appeal to the extent of question raised as aforesaid. Furthermore, the respondent Co-operative banks, as understood by Section 43D of the Income Tax Act on the Scheduled Bank. 12. Learned counsel for the appellants / revenue place reliance on the judgment in the case of Southern Technologies Ltd. Vs. Joint Commissioner of Income Tax, Coimbtore reported in 2010 (2) SCC 548. However, this judgment pertains to non-Banking financial companies. Uco Bank case (supra) and Mercantile Bank (supra) case squarely applies to the facts of the present case and issues involved. We therefore, do not find it necessary to interfere in the judgment of the Appellate Tribunal. We hold that no substantial question of law arises in these appeals. 10. We also find that this issue is further also covered by the decision of the Co-ordinate Bench of the Tribunal, Nagpur, in ACIT v/s Arvind Sahakari Bank Ltd., ITA no.376 and 377/Nag./2013, order dated 16/09/2015, wherein the Tribunal observed as under:- 10. As regards the second issue, the interest accrued of non performing assets of the bank, the AO has opine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led that the Accounting Policies followed by a company can be changed unless the AO comes to the conclusion that such change would result in understatement of profits. However, here is the case where the AO has to follow the Reserve Bank of India Directions 1998 in view of Section 450 of the Reserve Bank of India Act. Hence, as far as Income Recognition is concerned, Section 145 of the IT Act has no role to play in the present dispute . 10. Turning to the facts of the case before us, the assessee herein is a cooperative bank and it is not in dispute that it is also governed by the Reserve Bank of Indie. Hence the directions with regard to the prudential norms issued by the Reserve Bank of India are equally applicable to the assessee as it is applicable to the companies registered under the Companies Act. The Hon 'ble Supreme Court has held in the case of Southern Technologies Ltd (Supra), that the provision of 45Q of Reserve Bank of India Act has an overriding effect vis-a-vis income recognition principle under the Companies Act. Hence Sec.45 Q of the RBI Act shall have overriding effect over the income recognition principle followed by cooperative banks also. Hence the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctfully following the precedents, we hold that interest on NPA had not accrued to the assessee. Accordingly, we do not find any infirmity in the order of learned CIT(Appeals). Accordingly we uphold the same. 13. In the result, the appeals filed by the Revenue stand dismissed. 11. Since the issue for our adjudication is covered by the aforesaid decision of the Co-ordinate Bench of the Tribunal wherein the Tribunal while relying upon the judgments of the Hon ble Bombay High Court, Aurangabad Bench cited supra, have decided the issue in favour of the assessee, respectfully following the same, we decline to interfere with the well-reasoned and cogent order passed by the learned CIT(A) and dismiss the ground no.2, raised by the Revenue. The learned Departmental Representative failed to bring into light any distinguishing facts leading us to take a different view from the above judgments. 8. Since the issue raised by the Revenue rotates on a solitary issue of disallowance of provision for overdue interest is identical to the issue decided supra and in the background of the facts and circumstances of the present case, we find no infirmity in the order passed by the learned CIT(A) which we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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