{"id":8841,"date":"2014-11-03T09:04:56","date_gmt":"2014-11-03T03:34:56","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=8841"},"modified":"2014-11-03T09:04:56","modified_gmt":"2014-11-03T03:34:56","slug":"acit-vs-solapur-siddheshwar-sahakari-bank-ltd-itat-pune-interest-on-npas-is-not-taxable-as-there-is-a-conflict-on-the-point-between-vasisth-chay-vyapar-ltd-330-itr-440-del-and-sakthi-finance-ltd","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/acit-vs-solapur-siddheshwar-sahakari-bank-ltd-itat-pune-interest-on-npas-is-not-taxable-as-there-is-a-conflict-on-the-point-between-vasisth-chay-vyapar-ltd-330-itr-440-del-and-sakthi-finance-ltd\/","title":{"rendered":"ACIT vs. Solapur Siddheshwar Sahakari Bank Ltd (ITAT Pune)"},"content":{"rendered":"

Based on the prudential norms, the assessee herein did not admit the interest relatable to NPA advances in its total income. The Delhi High Court in Vasisth Chay Vyapar Ltd<\/a><\/strong> 330 ITR 440 (Del) has held that the interest on NPA assets cannot be said to have accrued to the assessee on the basis that “What to talk of interest, even the principle amount itself had become doubtful to recover. In this scenario it was legitimate move to infer that interest income thereupon has not \u201caccrued\u201d<\/em>“. However, the Madras High Court in the case of CIT vs. Sakthi Finance Ltd.<\/strong>, (2013) 31 taxmann.com 305 (Madras) has differed with the judgement of the Hon\u2019ble Delhi High Court in the case of M\/s Vasisth Chay Vyapar Ltd<\/strong>. (supra) on a similar issue, i.e. relating to interest income on NPAs. The Madras High Court followed the decision of the Supreme Court in the case of Southern Technologies Ltd<\/strong>. (supra) in holding that interest on NPAs was assessable to tax on accrual basis. We have carefully considered the submissions put-forth by the learned Departmental Representative based on the judgement of the Madras High Court in the case of Sakthi Finance Ltd<\/strong>. (supra). The controversy before the Hon\u2019ble Madras High Court related to non-recognition of interest income on NPAs by the assessee following the RBI guidelines. The Madras High Court took the view that the judgement of the Hon\u2019ble Supreme Court in the case of Southern Technologies Ltd<\/strong>. also applied to the Income Recognition Norms provided by RBI and therefore it held the interest income on NPAs is liable to be taxed on accrual basis and not in terms of RBI\u2019s guidelines. But the Delhi High Court in M\/s Vasisth Chay Vyapar Ltd<\/strong>. has taken a view that Southern Technologies Ltd<\/strong>. (supra) case did not apply to the Income Recognition Norms prescribed by RBI. Ostensibly, there is divergence of opinion between the Hon\u2019ble Delhi High Court and the Madras High Court as noted by the Madras High Court in its order. As there is no judgment of the Jurisdictional High Court. We are faced with two contrary judgments of the non-jurisdictional High Court. In such a situation, we are inclined to prefer a view which is favourable of the assessee following the judgement of the Supreme Court in the case of CIT vs. Vegetable Products Ltd.<\/strong> (1973) 88 ITR 192 (SC). (ACIT vs. The Omerga Janta Sahakari Bank Ltd<\/strong>. order in ITA No.350\/PN\/2013 dated 31.10.2013 followed)<\/p>\n","protected":false},"excerpt":{"rendered":"

Based on the prudential norms, the assessee herein did not admit the interest relatable to NPA advances in its total income. The Delhi High Court in Vasisth Chay Vyapar Ltd 330 ITR 440 (Del) has held that the interest on …<\/p>\n

ACIT vs. Solapur Siddheshwar Sahakari Bank Ltd (ITAT Pune)<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,8],"tags":[],"class_list":["post-8841","post","type-post","status-publish","format-standard","hentry","category-all-judgements","category-tribunal","judges-g-s-pannu-am","judges-sushma-chowla-jm","section-63","section-43d","counsel-pramod-shingte","court-itat-pune","catchwords-interest","catchwords-npa","catchwords-taxability","genre-domestic-tax"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/8841","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=8841"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/8841\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=8841"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/categories?post=8841"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/tags?post=8841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}