Dismissing the appeal of the revenue the Court held that Amount transferred to overdue interest Reserve (OIR) by debiting the interest received in profit and loss account in respect of non-performing assets (NPA) cannot be assessed on accrual basis. (ITA No. 1000 of 2016 dt 29-1-2019, 1003 of 2016, 1016 of 2016 dt. 29 -1-2019) ( Arising from ITA No. 1295 /2013 dt 30-12-2014. AY. 2009-10)
PCIT v. Solapur District Central Co -Op. Bank Ltd.( 2019) 261 Taxman 476 (2020) 428 ITR 306 (Bom.)(HC)/PCIT v. Laxmi Co-Operative Bank Ltd. ( 2019) 261 Taxman 476 / (2020) 428 ITR 306 (Bom)(HC)
S. 43D : Public financial institutions-Co-Operative Bank–Non performing assets (NPA)-Accrual of interest income- Provision is applicable to Co -Operative Societies–Amount transferred to overdue interest Reserve (OIR) by debiting the interest received in profit and loss account, cannot be assessed on accrual basis. [S. 145]