HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE M.S.RAMACHANDRA RAO
I.T.T.A. No.632 OF 2014
DATED: 13.11.2014 Between:
M/s.Andhra Pradesh Grameena Vikas Bank … Appellant And Assistant Commissioner of Income-tax … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE M.S.RAMACHANDRA RAO
I.T.T.A. No.632 of 2014
JUDGMENT: (per the Hon’ble The Chief Justice Sri Kalyan Jyoti Sengupta)
This appeal is sought to be preferred and admitted against judgment and order of the learned Tribunal dated 13.03.2014 in relation to the assessment year 2009-10 on the following suggested questions of law.
I) In the facts and circumstances of the case, whether the order passed by the Hon’ble Tribunal is correct in law in holding that the Non-performing Assets are liable for assessment, when the fact remains that in respect of the Non-Performing Assets the interest already charged but not realized during the year will be segregated and kept in a separate account called INCA, so that no income for that NPA shall be taken as revenue?
II) In the facts and circumstances of the case, whether the finding of the Hon’ble Tribunal is correct in holding that the NPA account is being treated as income, but the interest charged but not recovered on Non-Performing Assets accounts is not being treated as income and whenever the amounts are recovered, the INCA amount recovered in that particular year to tax extent of actual recovery will be credited to the interest account (recognized) and treated as income and making income tax payment?
III) In the facts and circumstances of the case, whether the finding of the Hon’ble Tribunal is justified in holding that the interest on NPA (assets) shall be chargeable to tax when admittedly the same will not fetch any income?
From the above, the question precisely is whether the concept of Non-Performing Assets as mentioned in the Circular has got any bearing with regard to the accrual of income and charging tax thereon under the Income Tax Act. It appears, for the assessment years 2007-08 and 2008-09, the Tribunal held in favour of the assessee. In the impugned judgment, the decision of the Hon’ble Supreme Court in the case of SOUTHERN TECHNOLOGIES LIMITED v. JOINT COMMISSIONER OF INCOME TAX,
[1]
COIMBATORE was not considered by the Tribunal.
According to us, consideration of that decision is also required. However, learned counsel for the appellant submits that in the case of Southern Technologies Limited (1 supra), the Hon’ble Supreme Court held in favour of the appellant. We think this can be considered by the assessing authority in terms of the direction of the Tribunal.
We do not find any reason to interfere with the impugned order and judgment, in the light of the decision of the Hon’ble Supreme Court reported in the case of Southern Technologies Limited (1 supra).
The appeal is accordingly dismissed.
13th NOVEMBER, 2014.
K.J. SENGUPTA, CJ
kvni
[1] (2010) 2 Supreme Court Cases 548
M.S.RAMACHANDRA RAO, J