By Sri.dilip M, Advocate For Sri. K v. Aravind, Advocate

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 07 DAY OF MARCH, 2018 PRESENT HON’BLE MR.JUSTICE DINESH MAHESHWARI, CHIEF JUSTICE AND HON’BLE MR.JUSTICE S. SUNIL DUTT YADAY INCOME TAX APPEAL NO. 780 OF 2017 BETWEEN 1. THE PR.COMMISSIONER OF INCOME-TAX, CIT(A), “2 FLOOR, SHREE TOWERS”, No.565/A, A1, OPPOSITE TO DRR HOSTEL, HADADI ROAD, DAVANGERE-577 004. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), “2 FLOOR, SHREE TOWERS”, No.565/A, A1, OPPOSITE TO DRR HOSTEL, HADADI ROAD, DAVANGERE-577 004. (BY SRI.DILIP M, ADVOCATE FOR SRI. K. V. ARAVIND, ADVOCATE) …APPELLANTS AND M/S. THE DAVANGERE URBAN CO-OPERATIVE BANK LTD., POST BOX NO.217, P B ROAD, DAVANGERE- 577 002. …RESPONDENT (BY MS.JINITA CHATTEREJEE, ADVOCATE FOR SRI. S.PARTHASARATHI ADVOCATE) THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED 16.06.2017 PASSED IN ITA NO.1275/BANG/2016, FOR THE ASSESSMENT YEAR 2009-2010 PRAYING THAT, (1) TO FORMULATE THE SUBSTANTIAL QUESTION OF LAW, (2) TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.1275/BANG/2016, DATED 16.06.2017 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), DAVANAGERE AND (3) TO PASS SUCH OTHER SUITABLE ORDERS. THIS INCOME TAX APPEAL COMING ON FOR ADMISSION,THIS DAY, THE CHIEF JUSTICE DELIVERED THE FOLLOWING: JUDGMENT Ms. Jinita Chattarjee, learned counsel appearing for Shri S. Parthasarathi, undertakes to file power for the respondent. The Revenue seeks to maintain this appeal under Section 260-A of the Income Tax Act, 1961 against the order dated 16.06.2017 as passed by the Income Tax Appellate Tribunal, Bengaluru [‘the Tribunal], in ITA. No. 1275/Bang/2016, (relating to the Assessment Year 2009-2010). Indisputably, the other appeal arising out of the same and common order dated 16.06.2017 pertaining to the same assessee and on the same question (relating to the Assessment Year 2010-2011) has been considered and dismissed by this Court on 28.02.2018, being ITA No. 781 of 2017. In the Judgment dated 28.02.2018 in ITA No. 781 of 2017 this Court has approved the impugned order of Tribunal with reference to the decision in the case of COMMISSIONER OF INCOME TAX AND ANOTHER v. CANFIN HOMES LTD. : [2012] 347 ITR 382 (Karnataka)while observing as under:- “Indisputably, there is no decision to the contrary by the Hon’ble Supreme Court on this question. Therefore, the decision aforesaid in Canfin Homes Ltd. stands concluded on the views of this Court that when a particular asset is shown to be NPA, the assumption is that it is not yielding any revenue; and there is no reason that the assessee be subjected to tax on the alleged notional income, even if it has adopted hybrid system of accounting. When the said decision in Canfin Homes Ltd. directly applies to the present case, the Tribunal cannot be said to have committed any error in approving the decision of the CIT (A), who had deleted the addition in respect of interest on NPAs.” The position aforesaid directly applies to the present case too. Hence, following the decisions aforesaid, this appeal also stands dismissed. Sd/- CHIEF JUSTICE Sd/- JUDGE Bkv/vgh*