Case Law Details
ACIT Vs Davangere District Central Co-operative Bank Ltd (ITAT Bangalore)
Introduction: The legal battle between ACIT and Davangere District Central Co-operative Bank Ltd reached its pinnacle at ITAT Bangalore. The core issue revolved around the addition made by the AO concerning interest accrued on non-performing assets (NPA). The CIT(A) stepped in, citing authoritative judgments, and ruled in favor of the bank. This article delves into the specifics of the case, the arguments presented, and the pivotal judgments that influenced the outcome.
Detailed Analysis: In the assessment years 2011-12 and 2013-14, the primary contention focused on the AO’s addition related to interest on non-performing assets. The CIT(A), drawing guidance from the esteemed decisions of the Hon’ble Apex Court in UCO Bank vs. CIT (237 ITR 889, 1999) and the Hon’ble Karnataka High Court in CIT vs. Canfin Homes Ltd. (347 ITR 0382), annulled the AO’s addition. The learned CIT(A) adhered to the established legal precedents, emphasizing the inapplicability of the AO’s stance.
The Revenue, dissatisfied with the CIT(A)’s decisions, sought redress at ITAT Bangalore. However, the ITAT, after scrutinizing the arguments, declined to intervene, upholding the CIT(A)’s reliance on the binding judgments. The core issue of interest addition on NPA remained settled in favor of the Davangere District Central Co-operative Bank Ltd.
Conclusion: In a significant victory for Davangere District Central Co-operative Bank Ltd, the ITAT Bangalore dismissed the Revenue’s appeals for the assessment years 2011-12 and 2013-14. The crux of the matter, revolving around the AO’s addition on interest accrued on non-performing assets, found resolution in the CIT(A)’s reliance on authoritative judgments. This case underscores the pivotal role of legal precedents in shaping tax dispute outcomes and reaffirms the importance of established principles in adjudication.
The ITAT Bangalore’s decision in ACIT vs. Davangere District Central Co-operative Bank Ltd provides valuable insights into the treatment of interest on non-performing assets. By aligning with well-established legal precedents, the ITAT reaffirms the significance of precedent in shaping tax dispute resolutions. The detailed analysis underscores the meticulous consideration given to authoritative judgments, highlighting the legal nuances that influence such decisions.
We find that in both these years, the only issue involved is regarding the addition made by the AO on account of interest accrued on non-performing assets (NPA) which was deleted by CIT(A). This addition was deleted by learned CIT(A) by following the judgment of Hon’ble Apex Court rendered in the case of UCO Bank Vs. CIT 237 ITR 889 (1999) and of Hon’ble Karnataka High Court rendered in the case of CIT Vs. Canfin Homes Ltd., 347 ITR 0382. It could not be shown by learned DR of the Revenue as to how these judgments are not applicable in the present case and since, the order of CIT(A) is by following these two binding judgments of Hon’ble Apex Court and of Hon’ble Karnataka High Court, we decline to interfere in the order of CIT(A) in both these years.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
These three appeals are filed by the Revenue and these are directed against three separate orders of learned CIT(A), Davangere all dated 28.04.2014 for the Assessment Years 2011-12, 2013-14 and 2014-15. All these three appeals were heard together and are being disposed of by way of this common order for the sake of convenience.
2. At the very outset, it was submitted by learned AR of the assessee that one appeal for Assessment Year 2014-15 in ITA No.1405/Bang/2019 is having tax effect below 50 lakhs and therefore, this appeal of the Revenue is not maintainable in view of the low tax effect as per the CBDT’s recent instructions. Accordingly, this appeal of the Revenue is dismissed because of low tax effect because we find that in this year, the addition of only of Rs.78,15,063/- was made by the AO and therefore, tax effect is definitely below Rs.50 lakhs.
3. In the result, appeal of the Revenue for Assessment Year 2014-15 is dismissed.
4. Now, we take up the appeal of the Revenue for Assessment Years 2011-12 and 2013-14. In respect of these two appeals, learned DR of the Revenue supported the respective Assessment Order whereas learned AR of the assessee supported the respective order of the CIT(A).
5. We have considered the rival submissions. We find that in both these years, the only issue involved is regarding the addition made by the AO on account of interest accrued on non-performing assets (NPA) which was deleted by CIT(A). This addition was deleted by learned CIT(A) by following the judgment of Hon’ble Apex Court rendered in the case of UCO Bank Vs. CIT 237 ITR 889 (1999) and of Hon’ble Karnataka High Court rendered in the case of CIT Vs. Canfin Homes Ltd., 347 ITR 0382. It could not be shown by learned DR of the Revenue as to how these judgments are not applicable in the present case and since, the order of CIT(A) is by following these two binding judgments of Hon’ble Apex Court and of Hon’ble Karnataka High Court, we decline to interfere in the order of CIT(A) in both these years.
6. In the result, all the three appeals of the Revenue are dismissed.
Pronounced in the open court on the date mentioned on the caption page.
