Trade link Securities Ltd. Vs. Income Tax Officer (ITAT Kolkata)
In the instant case, the addition was made by AO on account of interest due to assessee for ₹19 lacs. However, the assessee did not include the same in its income on the ground that the amount of loan given to M/s ISG Traders Ltd., was Non-performing asset (NPA). As per the Non-Banking Financial Companies Prudential Norms (Reserve Bank of India) no income of interest on NPA can be identified in the books of account. Indeed, the issue for the AY 2006-07 has been decided against the assessee by the Co-ordinate Bench of this Tribunal in assessee’s own case (supra) but we find that the fact of that case are distinguishable from the facts on hand. The addition in the AY 2006-07 was sustained by this Coordinate Bench of this Tribunal on the ground that assessee failed to demonstrate whether the interest was overdue or not. However, in the instant case, there is no ambiguity that the interest income was overdue as evident from the TDS certificate issued by M/s ISG Traders Ltd., which is placed on pages 10 of the paper book. In the similar facts and circumstances we find that various Honorable courts have held that interest income on NPA cannot be recognized.
