2019 (4) TMI 1229 - HC - Income Tax

Disallowance of Amortized Premium - HELD THAT - It is an admitted position that the controversy involved in the present case is no longer res integra as the same stands concluded by a decision of this High Court in the case of Commissioner of Incometax, RajkotII v. Rajkot District Cooperative Bank Ltd . . 2014 (3) TMI 110 - GUJARAT HIGH COURT held that amortisation of premium paid on acquisition of securities when the same are acquired at the rate higher than the face value. Such amortisation would have to be for the remaining period of maturity. This precisely the Tribunal had directed in the impugned order. Though contended, no contrary instructions of CBDT are brought to our notice. The instruction in question having been issued under section 119(2) of the Incometax Act, 1961, would bind the Revenue. No question of law, therefore, arises.

Summary

Issues:
Challenge to order deleting addition on account of amortized premium

Analysis:
The appellant revenue challenged the order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A,' which deleted the addition made by the Assessing Officer on the issue of disallowance of amortized premium amounting to ?2,10,11,715. The assessee filed its return of income for assessment year 2012-13, declaring a total income of ?69,51,17,191. The assessment framed under section 143(3) of the Income Tax Act included the aforementioned addition. The Commissioner (Appeals) deleted the addition based on a previous decision in the assessee's own case for the assessment year 2011-12, supported by a Tribunal decision in another case. The revenue then appealed to the Tribunal, which upheld the deletion of the addition. The High Court noted that the controversy was settled in a previous decision involving similar issues. The High Court cited the decision in the case of Commissioner of Income Tax, Rajkot-II v. Rajkot District Cooperative Bank Ltd., where it was held that amortization of premium paid on acquisition of securities at a rate higher than the face value should be done for the remaining period of maturity. As no contrary instructions of the Central Board of Direct Taxes (CBDT) were presented, the High Court found no question of law arising from the impugned order. Consequently, the appeal was summarily dismissed.