Dismissing the appeal of the Assessee the Court held that on the facts of the case it is not the CBDT which had issued guidelines under section 119. On the other hand the guidelines have been issued by the RBI which are binding on all the banking companies in general. However, when it comes to the assessment under the Income-tax Act the revenue authorities are bound by the provisions of the Income-tax Act. Therefore, the claim of the assessee that the interest accrued on NPAs should be excluded from computation of income was rightly negatived by the Assessing Officer which had been affirmed by the appellate authorities. (AY. 1999-2000)
State Bank of Hyderabad v. Jt. CIT (2023) 458 ITR 79/ 292 Taxman 526 / 335 CTR 304 (Telangana)(HC)
S. 28(i) : Business loss-Interest on NPAs-Accrual basis-Interest on NPAs was rightly taxed by the Revenue-Guidelines of RBI binding on Banking Companies-Appeal of the assessee is dismissed. [S. 36(1)(vii), 43D, 119,260A, Reserve Bank of India, Banking Regulation Act, 1949, S. 21]