Income Tax Appellate Tribunal - Chennai
Tamilnadu Power Finance & ... vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
'B' Bench Chennai
BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT
MEMBER AND
SHRI V.DURGA RAO, JUDICIAL MEMBER
.....
ITA Nos. 101 to 109/Mds./2011
Assessment years: 1996-97 to 2003-04 & 2006-07
&
ITA No.1922/Mds./2011
Assessment Year : 2007-08
M/s.Tamilnadu Power The Assistant
Finance & Infrastructure Commissioner of Income
Development Corpn. Ltd., Vs. Tax,
Tufidco Powerfin Towers, Company Circle-III(1),
No.490/3-4,Anna Salai, Chennai 600 034.
Nandanam,
Chennai 600 035.
PAN AAACT 2840 A
(Appellant) (Respondent)
ITA Nos.225 to 233 /Mds./2011
Assessment years: 1996-97 to 2003-04 & 2006-07
&
ITA No.2034/Mds./2011
Assessment Year : 2007-08
M/s.Tamilnadu Power
The Assistant Finance & Infrastructure
Commissioner of Income Vs. Development Corpn. Ltd.,
Tax, Tufidco Powerfin Towers,
Company Circle-III(1), No.490/3-4,Anna Salai,
Chennai 600 034. Nandanam,
Chennai 600 035.
PAN AAACT 2840 A
(Appellant) (Respondent)
2 ITA No. 101 to 109/1922//Mds/11
ITA No. 225 to 233/2034//Mds/11
Assessee by : Shri R.Vijayaraghavan,
Advocate
Department by : Dr.S.Moharana, C.I.T.
DR
Date of Hearing : 11.03.13
Date of Pronouncement : 21.03.13
ORDER
PER BENCH:
These are cross-appeals of assessee and department respectively for the impugned Assessment Years.
2. One Common ground appears in all the appeals of the Revenue which is regarding treatment of hire purchase income. Assessing Officer had declined to allow the assessee, deduction claimed under section 36(1)(viii) of the Income Tax Act, 1961 (in short 'the Act'). However, on appeals of assessee, CIT(A) allowed the deduction.
3. As against this, one common ground taken by the assessee in all its appeals, is with respect to disallowance of its 3 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 claim for deduction of lease income under section 36(1)(viii), which was confirmed by the CIT(A).
4. Facts apropos these two issues are that assessee, a Non- banking Financial Company owned by the Tamilnadu Government, had in its returns for the impugned years, claimed deduction under section 36(1)(viii) on its lease income, hire charges as well as interest received on deposits. These were in addition to its claim for similar deduction on interest on long term finance given by it to various concerns. Assessing Officer had declined to consider the former claim taking a view these were not income derived from Long term finance. Assessee had moved in appeal against the denial of deduction under section 36(1)(viii) of the Act, first before the CIT(A) and then before this Tribunal. This Tribunal had remitted the issue with regard to the claim of assessee for deduction under section 36(1)(viii) of the Act, on items other than interest on direct long term finance, back to the file of the Assessing Officer for consideration afresh. Such directions were given by the Tribunal for a reason that lower authorities had not gone into the aspect whether such deductions claimed assessee fell within the scope of Explanation (e) of the said section. This Tribunal noted that deduction under section 4 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 36(1)(viii) was available only to profits derived from a business of long term finance and since term 'long term finance' was defined in Explanation (e), it was necessary to see whether the claims of assessee fitted into the said definition.
5. Accordingly, the matter was once again, considered by the Assessing Officer. In such fresh proceedings, assessee was required to furnish documents justifying its eligibility for deduction under section 36(1)(viii) of the Act, with respect to its leasing income, hire purchase income and interest on deposits. Reply of the assessee was that it was a Non-banking Financial Corporation incorporated by the State in 1991, for providing long term finance for infrastructure development. As per the assessee, it was eligible for claiming deduction of these amounts since the funding which gave rise such income fell within the definition of long term finance given in Explanation(e) to section 36(1)(viii) of the Act. However, Assessing Officer was not impressed. According to him, assessee could not satisfy the conditions required under explanation (e) with regard income from leasing activity, hire purchase activity and interest on deposits. Assessing Officer held that unless money was actually lent or advanced with a condition that it was repaid along with interest 5 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 and unless period of repayment was five years or more, a deduction claimed under section 36(1)(viii) could not be allowed. As for interest on deposits, Ld. A.O. relying on the decision of Hon'ble Supreme Court in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. Vs. CIT ( 227 ITR 172) took a view that interest on short term deposits made out of surplus funds fell under the head 'income from other sources' and assessee was not eligible for deduction under section 36(1)(viii) of the Act. Further, according to him, the immediate source of income alone was to be considered for application of section 36(1)(viii). Reliance was also placed on the CBDT Circular No.1 of 2001/F.No.225/186/2000-ITA-II, dated 9th February, 2001 wherein the reasons for amending section 36(1)(viii) through Finance Act, 1995 was explained. According to him, purpose of the amendment was to restrict the deduction to income derived from the business of providing long term finance.
6. Ld. Assessing Officer also considered the definition of a Hire Purchase agreement under Hire Purchase Act, 1972 as also definition of a lease under the Transfer of Property Act, 1882, for supporting his findings that there was no lending of money when goods were given on hire or lease. Assessing Officer also noted 6 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 that assessee has claimed depreciation on leased assets, thereby showing that there was no element of financing in such leasing. Further as per the Assessing Officer, assessee had claimed exemption from Interest Tax Act on hiring income received for a reason that such income was not interest. Assessee had claimed depreciation on assets given on hire as well. Effectively, he denied the deduction claimed under section 36(1)(viii) to the assessee on its earnings from leasing, earnings from hiring and interest on deposits with bank. Its claim was allowed only in respect of interest on long term fiancé.
7. Assessee moved in appeal before the CIT(A) once again. Argument of the assessee was that its entire income was derived from long term finance, provided to Tamilnadu Electricity Board, whatever the classifications were. According to the assessee, long term finance included not only direct loans, but also indirect loans in the form of hire purchase, leasing and other advances. Argument of the assessee was that the agreements of hire purchase and lease were effectively only for financing the purchase of items mentioned therein and were not operating lease or hiring of goods simpliciter. Assessee also claimed that it had not availed depreciation on assets given under the hire 7 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 purchase agreement. Reliance was placed on the decision of Hon'ble Apex Court in the case of Sundaram Finance Ltd., Vs. The State of Kerala and Another (1966) AIR 1178, 1966 SCR(2) 828 and Asea Brown Boveri Limited Vs. Industrial Finance Corporation of India and Others (2006) 154 Taxman 512. Ld. CIT(A) was impressed with such argument in so far as it related to income from hire purchase. According to him, assessee was only financing the purchase of the assets by M/s.Tamilnadu Electricity Board. Assessee had also paid interest tax on the hire charges received from the Board. According to Ld. CIT(A), assessee had also not claimed any depreciation on assets given on hire. Balances were shown only as stock on hire, as a part of current assets. However, in so far as leasing income was concerned, CIT(A) was of the opinion that whatsoever was received was only lease rental and not interest. Further as per CIT(A), assessee had not paid any interest tax on the lease rental. According to him, lease rental stood on a different footing when compared to hire purchase transactions. He therefore, held that there was no element of interest in the lease rental received by the assessee. Accordingly, he held lease income to be not eligible for deduction under section 36(1)(viii) of the Act whereas hire charges were held as eligible for such deduction. 8 ITA No. 101 to 109/1922//Mds/11
ITA No. 225 to 233/2034//Mds/11
8. With regard to interest on deposit on which also Assessing Officer had denied the claim under section 36(1)(viii) of the Act, Ld. CIT(A) directed the Assessing Officer to verify the contention of the assessee that it had not in the first place claimed any deduction for such interest.
9. Now, before us, Ld. D.R strongly assailing the order of the CIT(A) in so far as it related to his direction that hire purchase income was eligible for deduction under section 36(1)(viii) and supporting his order in so far as it related to the confirmation of the treatment of lease income, submitted that conditions mentioned in section 36(1)(viii) of the Act were not satisfied with respect to such income. According to him, such deduction was provided in the statute, for encouraging investments in infrastructure facility, by providing long term finance. Long term Finance was clearly defined in Explanation (e) to the said section and neither hire purchase income nor the lease income fell under the definition. Further, according to him, what could be allowed was only income derived from a business of providing long term finance and nothing more. A direct nexus with the business of providing long term finance was to be shown and if such nexus 9 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 was not there, the income will not be eligible for claiming deduction under section 36(1)(viii). According to him, Ld. CIT(A) fell in error when he attempted a distinction between hire finance income and lease rental income. Neither hire purchase income nor lease income had any direct connection with the business of providing long term finance. Reliance was placed on the decision of Co-ordinate Bench in ITA No.530 & 531/03, 1497/04, 1561 & 1562/06 dated 20th July, 2007 in assessee's own case in which it was held that word 'derive' used in Section 36(1)(viii) would not bring under its sweep, items of income which were not having immediate nexus with long term financing business. D.R. also placed reliance on the decision of Delhi bench of this Tribunal in the case of Tourism Finance Corporation of India Vs. JCIT (2010) 2 ITR (Trib) 1 and National Co-operative Development Corporation Vs. ACIT (2012) 33 CCH 154 (Del.). Further, according to him, equitable consideration were out of place while interpreting a taxing statute and when the language was clear and un-ambiguous, there was no scope for importing into the statute, words, which were not there. In this regard reliance was placed on the decisions of the Hon'ble Apex Court in the case of CIT Vs.Orissa State Warehousing Corpn. 201 ITR 729 and Smt Tarulata Shyam & others Vs. CIT 108 ITR 345.
10 ITA No. 101 to 109/1922//Mds/11
ITA No. 225 to 233/2034//Mds/11
10. Per contra, Ld. A.R. in support of his appeal and supporting the order of CIT(A) with regard to his allowance of hiring income submitted that long term finance had many facets. It did not simply mean, direct cash loan, but also included loans, which helped acquisition of assets. According to him, lease as well as hire agreements were only for providing finance to the M/s.Tamilnadu Electricity Board, which was directly acquiring the assets. Further, it was submitted by the A.R that assets hired or leased out to M/s.Tamilnadu Electricity Board could never be resumed back. By very nature of such assets, it could not be used elsewhere other than in the sub-station & distribution and power projects of M/s.TNEB. When M/s.Tamilnadu Electricity Board could not satisfy the rigorous conditions for availing a cash loan, finance was provided to it in an indirect manner by helping it purchase the assets it required, and paying for such purchase. Strict construction of the lease and hire purchase agreements made by Assessing Officer was out of place. According to him, commercial consideration ought have been given more importance. Ld. A.R submitted that the terms used in section 36(1)(viii) were profits derived from business of providing long term finance and not profits derived from long term finance. 11 ITA No. 101 to 109/1922//Mds/11
ITA No. 225 to 233/2034//Mds/11 According to him, there was a subtle difference between profit derived from business of providing long term finance and profit derived from long term finance. Business of providing long term finance included all type of financing, including indirect financing by way of leasing and hire purchase. Reliance was placed on the decision of Delhi Bench of this Tribunal in Power Finance Corporation Ltd. Vs. DCIT 10 SOT 190 and Rural Electrification Corporation Ltd. Vs. ACIT, 34 SOT 159.
11. We have perused the orders of the lower authorities and heard rival contentions. We find that the matter was earlier considered by this Tribunal for very same Assessment Year and remitted back to the Assessing Officer for consideration afresh with following directions:-
" The learned counsel of the assessee has submitted that the assessee is solely a long term lending institution and its resources and applications have nexus with long term finance. It has been submitted that deduction u/s 36(1)(viii) contemplates benefit of deduction to be given to approved financial corporations on the profits derived from business of providing long term finance and the benefits is not limited to "profit from providing long term finance" but from profit derived there from. Finance can be in many ways viz., loans, equities, hire purchase, lease, investments and deposit. These all can be and are in fact for long term. Hence, the entire income is from business of providing long term finance and the assessee has no other business.12 ITA No. 101 to 109/1922//Mds/11
ITA No. 225 to 233/2034//Mds/11 The learned departmental representative in rebuttal of the aforesaid claim placed reliance upon the sanguine provisions of section 36(1)(viii) and the explanation thereto which reads as under:
"(viii) [in respect of any special reserve created [and maintained] by a financial corporation which is engaged in providing long-term finance for .. [industrial or agricultural development or development ·of infrastructure facility in India or by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes, an amount not exceeding forty per cent of the profits derived from such business of providing long-term finance (computed under the head ''Profits and gains of business or profession"
[before making any deduction under this clause]) carried to such reserve account:] Provided that where the aggregate of the amounts carried to such reserve account from time to time exceeds [twice the amount of] the paid-up share capital [and of the general reserves] of the corporation [or, as the case may be, the company}, no allowance under this clause shall be made in respect of such excess.
[Explanation.-In this clause,-
(a) ''financial corporation" shall include a public company and a Government company;
(b) "public company shall have the meaning assigned to it in section 3 of the Companies Act, 1956(1 of 1956);
(c) "Government company" shall have the meaning assigned to it in section 617 of the Companies Act;
1956 (1 of 1956);
[(d) ''infrastructure facility shall have the meaning assigned to it in clause (23G)of section 10:) [(e) "long-term finance" means any loan or advance where the terms under which moneys are loaned or advanced provide for repayment along with interest thereof during a period of not less than fiv e years;]"
From the reading of the aforesaid, it is evident that the deduction envisaged under this section pertains to profits derived from business of providing long term finance, which has specifically been defined. In this context, we also draw support from exposition in H.H. Prince Azam Jha Bahadur Vs. Expenditure Tax Officer 1971 83 ITR 92 (SC) that the act in the very nature of 13 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 things cannot be absolutely cast upon logic. It is to be read and understood according to its language. If a plain reading of the language compels the Court to adopt an approach different from that dictated by any rule of logic, the Court may think of adopting it.
It further transpires that the circular explaining the rationale for amendment .in section 36(1)(viii) reads as under.:
"It was noted that many of these approved financial corporations/approved public companies had diversified their activities and were claiming deduction under this section even in respect of their income derived from activities other than those specified in this section. As there was no justification for allowing the deduction with reference to income from other activities or from sources other than business the Finance Act, 1995, has amended section 36(1) (viii) to limit the deduction to 40 per cent only in respect of income derived from providing long term finance for the activities specified in section 36(1)(viii). Now, income arising from other business activities or from sources other than business will not be taken into account for computing deduction under section 36(1)(viii)."
Considering the present case, particularly in the light of the CBDT circular clarifying the rationale behind the amendment, it is evident that the intention of providing deduction u/s. 36(1)(viii) is only in respect of income derived from providing long term finance for the activities specified u/s 36(l)(viii). Hence, the learned counsel of the assessee's interpolation that the word "derived" used in the section will bring omnibus activities of the assessee under the sweep of this section is not on terra firma. As is evident from the aforesaid circular, the very purpose of bringing this amendment was to restrict this deduction as income derived from other diversified activities were being claimed under it. Under the circumstances, the reliance placed by the learned counsel of the assessee on the word "derived" cannot oxygenate the assessee's claim. As held by Privy Council in Commissioner of Income Tax Vs. Raja Bahadur Kamakhaya Narayan Singh & Others (1948) 16 ITR 325, the word "derived" is not a term of art. Its use in the definition indeed demands an enquiry into the genealogy of the product but the enquiry should stop as soon as the effective sources are discovered.
Considering the present case through the prism of the aforesaid precedent, we find that in determining the profits eligible for 14 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 deduction under this section, one has to go no further than explanation 'e' defining 'long term finance' under this section. From the facts of this case, we find that in dealing with the eligibility of the disputed income for deduction contemplated u/s 36(1)(viii), the lower authorities have not gone into this aspect as to whether this aspect of section is satisfied or not. Hence, in the interest of justice, we restore this issue to the files of the Assessing Officer to give a finding as to whether these activities would come under explanation 'e' of section 36(1)(viii). It that be so, the assessee will be eligible for this deduction. "
12. The direction of the Tribunal was to consider whether the income from leasing and hiring fell within the ambit of section 36(1)(viii) and also whether such activities came within the definition of Long term Finance given in Explanation (e) to section 36(1)(viii). In other words, essentially it was required to decide whether such activities of lease and hire undertaken by the assessee fell within the definition of long term finance and if it were to be considered long term finance whether income from such activities could be considered as derived from business of providing long term finance. For deciding these issues, primary requirement, in our opinion, is to see the agreements based on which assessee had provided such facilities to M/s.Tamilnadu Electricity Board or to any other customer, for that matter. Without going through terms of the hire agreement and terms of 15 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 the lease agreement, if one was to come to a conclusion that it was a simple case of financing, it will be terra figmenta and not terra firma. The terms entered in between the parties will decide the nature of the transactions. Substance of such agreement will show whether the intention was only financing or the intention was leasing or hiring. We also find some contradictions between the findings of the CIT(A) and the findings of the Assessing Officer. Assessing Officer states in his order that assessee had claimed depreciation both for leased assets as well as hired assets, whereas the CIT(A) in his order says that assessee had not claimed depreciation on assets hired out. Further, Assessing Officer mentions in his order that hire purchase income was claimed by the assessee as exempt from interest tax, whereas CIT(A) says that assessee had paid interest tax on hire receipts. However, none of the lower authorities went into the agreements entered by the assessee with its customers to find the true nature of the transactions.
13. Difference between a finance lease and operating lease and hire purchase finance and simple hiring of goods, have been well brought out by the decision of Hon'ble Apex Court in the case of M/s.ICDS Ltd. Vs. CIT ( Civil appeal No.3286 to 3290 of 2008 16 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 dated 14.01.13). Relevance of Accounting Standards-19 of Institute of Chartered Accountant of India, while deciding on such issues has been clearly brought out by the Special Bench of this Tribunal in the case of Indus Ind Bank Vs. ACIT in (2012) 135 ITD
165. What comes out of these decisions is that nature of a hire and for lease have to be seen before coming to a conclusion whether these were mere operational or financial. No doubt, Assessing Officer relied on the definition of 'Hire Purchase Agreement' under the Hire Purchase Act, 1972 and definition of 'lease' under Transfer of Property Act, 1882. These are definitions in the respective enactments and will have little relevance if the terms of agreements entered into by the parties show a different intention. Unless and until all the ingredients specified in Explanation (e) to section 36(1)(viii) are satisfied, the transaction will not fall within the reach of long term finance. If the transactions are not considered as 'Longterm Finance', there is no question of any deduction being given under section 36(1)(viii) of the Act since the claim gets ousted at the threshold. An interpretation often taken that in case of ambiguity or doubt, benefit always went to the assessee, in our opinion, no longer hold good in view of the judgement of Hon'ble Apex Court in the case of Commissioner of Central Excise V. Harichand Shrigopal 17 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 (2011) 1 SCC 236. Their Lordships clearly held that a person who claimed exemption or concession, is required to establish clearly that he was covered by the provision concerned and in the case of doubt or ambiguity, benefit would go to the State. Considering all these aspects, we are of the opinion that matter requires a fresh look by the Assessing Officer. We set aside the the orders of the authorities below and remit the issues regarding claim of deduction under section 36(1)(viii) on lease income and hire purchase income, back to the file of Assessing Officer for consideration afresh in accordance with law.
14. The finding of the Assessing Officer that interest on short term deposits was not eligible for the deduction under section 36(1)(viii) , which were confirmed by the CIT(A), in our opinion, is in accordance with law. Deposits can never be treated on par with loans or advances. Therefore, interest on deposits will never fall within the definition of long term finance given in Explanation (e) to section 36(1)(viii) of the Act. We do not find any merit in this ground taken by the assessee in its appeal for A.Y. 2007-08.
18 ITA No. 101 to 109/1922//Mds/11
ITA No. 225 to 233/2034//Mds/11
15. Revenue has taken a ground regarding levy of interest Under section 234D in their appeals for Assessment Years 1997- 98, 1999-00, 2000-01, 2001-02, 2002-03, 2003-04 & 2006-07. Ld. CIT(A) held that such levy was applicable only from Assessment Year 2004-05 relying on the decision of Delhi Special Bench of Tribunal in the case of ITO Vs. M/s.Ekta Promoters Pvt Ltd. in 113 ITD 719. However, we find that Hon'ble jurisdictional High Court in the case of CIT Vs. Infrastructure Development Finance Co. Ltd. 340 ITR 580 has held that where regular assessment was completed after the amended provision came into operation, assessee was liable to pay interest on the refunded amount. Therefore, the issue of levy of interest for these years is remitted back to the file of the Assessing Officer, for verifying the date on which the regular assessments were completed for the impugned Assessment Years. If regular assessments were completed after 01.06.03, levy of penalty under section 234D was justified and if the regular assessment was completed prior to that date, there could not be any levy of penalty under section 234D of the Act. Ordered accordingly. Related ground of the Revenue is allowed for statistical purposes.
19 ITA No. 101 to 109/1922//Mds/11
ITA No. 225 to 233/2034//Mds/11
16. Only other issue left in Revenue appeal is a ground in its appeal for Assessment Year 2006-07, regarding disallowance under section 43D of the Act, which was deleted by the CIT(A).
17. Facts apropos are that assessee had advanced a sum of ` 300 lakhs, as term loan to M/s.NEPC Micon Ltd., who had failed to repay the installments due from 01.04.1997. Assessee had classified the dues as Non-Performing Asset in its books based on Reserve Bank of India guidelines. Assessee had not shown any accrual of interest on such term loan in its accounts. Assessing Officer was of the opinion that since it was following mercantile system of accounting, it was mandatory to show the accrued interest. As per the Assessing Officer, RBI guidelines were only for the purpose of supervision, and management of non banking financial companies and was not relevant for ascertaining income under the Income Tax Act. Though assessee explained that by virtue of Sec.43D, it was necessary for it to offer such interest income, only when interest was realized, Assessing Officer was not impressed. An addition was made.
18. In its appeal before the CIT(A), argument of assessee was that interest was not at all credited to the profit and loss account. 20 ITA No. 101 to 109/1922//Mds/11
ITA No. 225 to 233/2034//Mds/11 When interest was not at all credited, there was no question of accrual, especially since the assessee had classified the loan as non performing asset. Further, according to the assessee, Sec.43D was applicable, since Government of Tamilnadu by G.O. Ms. No.47 dated 09.01.1991 had declared it as a State Financial Corporation. Ld. CIT(A) was appreciative of these contentions and deleted the addition made by the Assessing Officer.
19. Now, before us, Ld. D.R assailing the order of Ld. CIT(A) submitted that assessee was following mercantile accounting system and therefore, it was mandatory to account the income accrued on loans given by it. Parties were duty bound to pay interest to the assessee and assessee was lawfully entitled for such interest. Hence, it could not say that there was no accrual of income. Per contra, Ld. A.R. supported the order of Ld. CIT(A).
20. We have perused the orders of the lower authorities and heard the rival contentions. There is no doubt that assessee had not charged in its books of accounts any interest on the loans classified by it as non performing assets. It is not a case where assessee had credited such interest and then claimed write off., 21 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 Assessee might have been following mercantile system of accounting. However, the prudential norms prescribed by RBI, for non banking financial Company under section 45 Q of the RBI Act, made it obligatory for the assessee to classify the loans on which interest was not received for a period exceeding six months, as non-performing assets. Once it was so classified, interest could not be charged in its accounts and taken as income. Jurisdictional High Court in the case of CIT Vs. Elgi Finance Ltd (293 ITR 357) has held that assessee was justified in not recognizing income from non performing assets in consonance with the notification issued by RBI. We are of the opinion that this decision of Hon'ble jurisdictional High Court goes in favour of the assessee. We therefore, cannot find any reason to interfere with the order of the CIT(A) in this regard.
21. To summarise the result, appeals of assessee for Assessment Years 1996-97, 1997-98, 1998-99, 1999-00, 2000- 01, 2001-02, 2002-03, 2003-04 and 2006-07 are allowed for statistical purposes whereas its appeal for Assessment Year 2007-08 is partly allowed for statistical purposes. Appeal of Revenue for Assessment Years 1996-97, 1997-98, 1998-99, 1999-00, 2000-01, 2001-02, 2002-03, 2003-04 & 2007-08 are 22 ITA No. 101 to 109/1922//Mds/11 ITA No. 225 to 233/2034//Mds/11 allowed for statistical purposes whereas its appeal for Assessment Year 2006-07 is partly allowed for statistical purposes.
Order pronounced on Thursday, the 21st March, 2013 at Chennai.
Sd/- Sd/-
(V.DURGA RAO) (ABRAHAM P GEORGE)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Chennai,
Dated 21st March, 2013 .
K S Sundaram
Copy to: Assessee/AO/CIT (A)/CIT/D.R./Guard file
23 ITA No. 101 to 109/1922//Mds/11
ITA No. 225 to 233/2034//Mds/11