INCOME TAX ACT, 1961

Section 260A

Appeal (High Court) - Interest accrued on non-performing assets - Assessee maintaining mercantile system of accounting -

Assessee, a co-operative bank, became taxable entity like the commercial banks from the assessment year 2007-08. The return of income was processed under section 143(1) and the case of the assessee was selected for scrutiny and notice under section 143(2) was issued. AO made an addition on account of interest income following the mercantile system of accounting, provision made for non-performing assets. CIT(A) held that effective rate of interest on the amount of advances was 7.5%, whereas, AO considered the same to be 9%, which was on higher side. Tribunal upheld the order of CIT(A). Held: The substantial question of law was already answered by a Bench of this court vide judgment in The Urban Co-operative Bank Ltd. [ITA No. 471 of 2013, dt. 30-6-2014] and Special Leave Petition against the aforesaid order has been dismissed by Supreme Court keeping the question of law open. The said aspect of the matter could not be disputed by the counsel for the revenue. Therefore, appeal of Revenue was dismissed.

Followed:CIT & Anr. v. Urban Co-Operative Bank Ltd. [Petition(s) for Special Leave to Appeal (C) 1066 of 2015, CC No(s). 206/2015, dt. 12-1-2015].

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08

INCOME TAX ACT, 1961

Section 260A

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