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TMI Blog2014 (5) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming expenditure towards amortization of premium on investment held till maturity. 2. Whether on the facts and in the circumstances of the case, the Ld.CIT(A)-I, Nashik was justified in deleting disallowance of Rs.10,60,882/- on account of expenses claimed under the head Education fund. 3. The appellant prays the order of the Assessing Officer may be restored. 4. The appellant prays to adduce such further evidence to substantiate his case. 5. The appellant prays leave to add, alter, clarify, amend and or withdraw any grounds of appeal as and when the occasion demands. 2. The assessee is a co-operative society engaged in the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Govt. Securities Premium which has been held to Maturity (HTM) by bank of such securities. The Assessing Officer rejected the contention of assessee and made disallowance in question. We find that the Master Circular on Investment by primary (urban) cooperative banks (updated up to 30.06.2007) issued by RBI is relevant for deciding the issue at hand. The relevant portion of the circular is reproduced below: "16. VALUATION OF INVESTMENTS 16.1 Valuation Standards 16.1.1 Investments classified under 'Held to Maturity' category need not be marked to market and will be carried at acquisition cost unless it is more than the face value, in which case the premium should be amortiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategories viz. Held to Maturity (HTM), Held for Trading (HFT) and Available for Sale (AFS). Investments classified under HTM category need not be marked to market and are carried at acquisition cost unless these are more than the face value, in which case the premium should be amortized over the period remaining to maturity. In the case of HFT and AFS securities forming stock in trade of the bank, the depreciation / appreciation is to be aggregated scrip wise and only net depreciation, if any, is required to be provided for in the accounts. The latest guidelines of the RBI may be referred to for allowing any such claims." 5. The Mumbai Bench in the case of ACIT Vs. Bank of Rajasthan Ltd. - 2011-TIOL-35-ITAT-MUM, has followed the above Inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribution of education made by the multi-state cooperative society to central government. The amount paid is contributed to the Education Fund set up by Govt. of India. Thus, it is not any tax, duty, cess or fee and hence section 43B is not applicable to this payment. However, the Assessing Officer did not accept this contention of assessee and disallowed this expenditure and added to the total income of the assessee. 7. The matter was carried before first appellate authority, wherein the various contentions were raised on behalf of assessee. Having considered the same, the CIT(A) granted relief to the assessee. The same has been opposed before us on behalf of revenue, inter alia, requested to set aside the order of CIT(A) on the issue and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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