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TMI Blog2012 (12) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income, therefore, as per provision of Sec. 43B, salary paid to the employees, before filing the return of income, is an allowable deduction - in favour of assessee. Premium paid on government securities - Addition to income deleted by CIT(A) - Held that:- As decided in American Express International Banking Corporation Versus Commissioner Of Income-Tax [2002 (9) TMI 96 - BOMBAY HIGH COURT] that trading of securities is a banking business - as the assessee bank used to buy and sell securities to maintain statutory liquidity ratio, however, this buying and selling resulted into business income or loss was subjected to income-tax - in favour of assessee. - ITA No.249/Ind/2012 - - - Dated:- 23-7-2012 - SHRI JOGINDER SINGH And SHRI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggrieved in not allowing deduction u/s 43B of the Act of provisions for cadre staff salary to the extent paid before filing the return of income is concerned, we find that any actual payment before filing of return/before due date is an allowable/deductible expenditure u/s 43B(b) of the Act. The assessee made provision in respect of cadre staff salary. The part of the provision was paid as salary to the employees concerned before filing the return. It is also not in dispute that the amount was debited to profit and loss account, therefore, the part of the salary which was paid to the employees before filing of return of income is an allowable deduction. The ratio laid down in the case of CIT v. Amco Batteries (2006) 155 Taxman 167 (Karn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid order dated 19.10.2011 passed by the Tribunal, that too, in the case of the assessee. For ready reference, the relevant portion is reproduced hereunder: 3. In the cross appeal of the revenue, the crux of arguments on behalf of the revenue is in support of the assessment order whereas the learned counsel for the assessee defended the impugned order. We have considered the rival submissions and perused the material available on file. Brief facts of the case are that it was observed by the Assessing Officer that the assessee in its profit and loss account debited a sum of Rs.28,40,000/- on account of premium paid in respect of Government securities. The claim of the assessee is that the securities were purchased and the impugned amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee bank used to buy and sell securities to maintain statutory liquidity ratio, however, this buying and selling resulted into business income or loss was subjected to income-tax. As per sec. 6(1) of the Banking Regulation Act, banks were specifically permitted buying and selling debentures, certificates and other instruments/securities. Admittedly, the trading of the securities is a banking business and income earned from such trading in government securities is a banking business, as such, premium paid on government securities is a revenue expenditure. Our view is supported by the decision in American Express International Banking Corporation vs. CIT (258 ITR 601) (Bom) wherein it was held that trading of securities is a banking busine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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