Gujarat High Court
Principal Commissioner Of Income Tax ... vs Dahod Urban Cooperative Bank Ltd on 10 September, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/TAXAP/1122/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 1122 of 2018
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PRINCIPAL COMMISSIONER OF INCOME TAX VADODARA 4
Versus
DAHOD URBAN COOPERATIVE BANK LTD
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Appearance:
MR.VARUN K.PATEL(3802) for the PETITIONER(s) No. 1
DARSHAN R PATEL(8486) for the RESPONDENT(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 10/09/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Revenue has filed this appeal challenging the judgment dated 10.01.2014 of the Income tax Appellate Tribunal for the assessment year 200708. The questions framed by Revenue are multiple. However, issue is singular, namely, the allowability of the assessee's claim of deduction of Rs.76,93,176/. This question arises in the following background.
2. The respondent assessee is a Cooperative Bank. Under the Directors of RBI the assessee was required to deposit certain amounts with the District Cooperative Bank, an apex body. Due to financial hardship the District Page 1 of 3 C/TAXAP/1122/2018 ORDER Cooperative Bank could not pay interest on such deposit. Even the principal became doubtful. Under such circumstances, in the return filed the assessee put a note that the taxability of the accrued interest be adjudicated. The Tribunal ultimately granted the relief to the assessee on the principles of real income. The Revenue questions this decision primarily on two grounds; firstly, that without making a claim in the return or filing a revised return such claim could not have been sustained. Secondly, that the assessee bank was following mercantile system of accounting and had to offer the interest to tax on the basis of accrual.
3. At the outset, learned counsel for the assessee contended that the tax effect is lower than the threshold limit prescribed by CBDT in its latest circular enabling the Department to prefer appeal before the High Court. Shri Varun Patel for the Department, however, clarifies that the dispute falls under exception clause permitting Revenue to file appeal when it arises out of audit objections.
4. Be that as it may, counsel for the assessee stated that the same amount was offered to Page 2 of 3 C/TAXAP/1122/2018 ORDER tax in the later assessment year 201314 when the amount was actually repaid. The Revenue accepted such position and they therefore cannot tax the same amount second time in the present. Recording such statement, we propose to close this appeal. We are conscious that the Revenue could argue that in tax matters as much as taxing an amount, the correct year during which the same should be taxed is also important. However, as noted, in so far as disputed sum is concerned, it is below the tax limit prescribed by the CBDT. Further, as stated by the counsel for the assessee the tax is already deposited in the later year. The tax appeal is therefore disposed of. If the Assessing Officer finds that for some reason there is confusion about the actual interest is being taxed in the later year as stated, it would be open for the Revenue to file recall application in this appeal.
(AKIL KURESHI, J) (B.N. KARIA, J) K.K. SAIYED Page 3 of 3