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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 ..... zation of premium paid on government securities is allowable expenditure - CIT(A) was justified in deleting the disallowance – Decided against Revenue. Disallowance of expenses claimed under education fund – Held that:- The assessee is a cooperative bank, has paid contribution to the Education Fund of State Government as per guidelines of Commission of Cooperative Department - The contribution fund is mandatory on the part of every cooperative bank registered in the State of Maharashtra - The assessee has demonstrated that as per Cooperative Society Act, any order or instruction issued by the Govt. of Maharashtra is mandatory on the part of cooperative society / cooperative bank - the bank has to work under the control of Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 of banking i.e. accepting deposits from members and lending the same and earning interest income from members and also earning income on investment. The assessee filed return of income declaring total income of Rs. 17,03,46,620/- on 25.09.2009. The Assessing Officer scrutinized the return of income and assessed the income of assessee at Rs. 17,31,29,110/- vide impugned assessment order. Among others, the Assessing Officer made addition of Rs. 3,73,600/- on account of Amortization of Govt. Securities and Rs. 10,60,822/- on account of Education Fund. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 amortized over the period remaining to maturity. 16.1.2 The individual scrip in the 'Available for Sale' category will be marked to market at the year-end or at more frequent intervals. The book value of the individual securities would not undergo any change after the revaluation. 16.1.3 The individual scrip in the Help for Trading category will be marked to market at monthly or at more frequent intervals. The book value of individual securities in this category would not undergo any change after marking to market. Note:- Securities under AFS and HFT categori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Bank of Rajasthan Ltd. - 2011-TIOL 35-ITAT-MUM, has followed the above Instruction of CBDT. The above decision laid down that in the case of bank premium paid in excess of the face value of investments classified under HTM category which has been amortized over a period till maturity is allowable as revenue expenditure since the claim is as per RBI guidelines and CBDT has also directed to allow the said premium. In view of above circular, instruction and guidelines issued by the CBDT and RBI, amortization of premium paid on government securities is allowable expenditure. In view of above, the CIT(A) was justified in deleting the disallowance of Rs. 3,73,600/-. We uphold the same. 6. The next issue is with regard to addition of Rs. 10, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue, inter alia, requested to set aside the order of CIT(A) on the issue and restore to that of Assessing Officer. On the other hand, the learned Authorized Representative has supported the order of CIT(A) on the issue. 8. After going through the rival submissions and material on record, we find that the assessee is a cooperative bank, has paid contribution to the Education Fund of State Government as per guidelines of Commission of Cooperative Department. The contribution fund is mandatory on the part of every cooperative bank registered in the State of Maharashtra. The assessee has demonstrated that as per Cooperative Society Act, any order or instruction issued by the Govt. of Maharashtra is mandatory on the part of cooperative s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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