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TMI Blog2015 (11) TMI 1386X X X X Extracts X X X X X X X X Extracts X X X X ..... tization of premium on investment in Government Securities Held to Maturity (HTM) has been repeatedly raised and the Tribunal has been consistently deciding the issue in favour of the assessee. No infirmity in the order of the Ld.CIT(A) deleting the addition - Decide against revenue. - ITA No. 698/PN/2014 - - - Dated:- 31-8-2015 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Subodh Ratnaparkhi For The Revenue : Shri Hitendra Ninave ORDER PER VIKAS AWASTHY, JM : This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-I, Thane dated 13-12-2013 for the assessment year 2010-11. The only issue raised by the Revenue in appeal is against allowing the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee submitted at the outset that the issue raised by the Revenue in appeal is squarely covered in favour of the assessee by the decision of Tribunal in assessee s own case in ITA No. 2173/PN/2012 for the assessment year 2009-10 decided on 23-09-2013. The ld. AR placed on record a copy of the order of Tribunal in ITA No. 2173/PN/2012. 4. The ld. DR vehemently supported the findings of Assessing Officer. However, when confronted with the order of Co-ordinate Bench of the Tribunal in assessee s own case for assessment year 2009-10, the ld. DR fairly admitted that the issue in appeal has been decided in favour of the assessee in assessee s own case in the earlier assessment year. 5. Both sides heard. Orders of the authorities bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed the doors for cooperative banks for claiming the benefit of deduction u/s.80P(2)(a)(i) from this total income. However, the cooperative society should now be entitled to be assessed as normal banking company. The clause (4) inserted in section 80P has taken away the benefit of the erstwhile deduction available to cooperative society in carrying on business of banking or providing credit facility to its members. The new clause (4) inserted by the Finance Act, 2006 w.e.f. 01-04-2007 reads as under : The provision of the section was not in relation to any cooperative bank other than agricultural credit society or primary cooperative agricultural and rural development bank . 5. The intention of the provision may be derived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les. As per the extant RBI guidelines dated 01-07-2009 the investment portfolio of the banks is required to be classified under 3 categories viz., Held the maturity HTM), Held for Trading (HFT) and Available for Sale (AFS). The value of each kind of investment is to be done in the following manner: Sr.No. Classification Valuation Norms of Investment. 1. HTM These are carried at acquisition cost unless the cost is more than the face value, in which case the premium should be amortised over the period remaining to maturity. The premium is required to be amortised over the period remaining to maturity. This apart, any permanent diminution in value shall FV shall go on to reduce cost of the investment. 2. AFS The individual sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to for allowing any such claims. 8. The ITAT, Mumbai Bench, in the case of ACIT vs. The Bank of Rajasthan Ltd. (2011) TIOL-35-ITAT-Mumbai, has held that in case of banks, the premium paid in excess of face value of investments classified under HTM category which has been amortised over the period till maturity is allowable as revenue expenditure since the claim is as per RBI Guidelines and CBDT also has directed to allow such premium. It has also been held in the case of Catholic Syrian Bank Ltd. Vs. ACIT that amortization on purchase of Government securities was made as per prudential norms of the RBI and same was allowable deduction. In view of above, assessee was justified in contending for amortization of premium paid in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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