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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 ..... ised by the Revenue in appeal is as under: "On the facts and in the circumstances of the case, and in law, the ld. CIT(A)-I, Thane has erred in appreciating the fact that the securities under the categories of HTM are in the nature of capital asset and hence premium paid thereon is also a capital expenditure and therefore is not allowable revenue expenditure." 2. The brief facts of the case are : The assessee is a Co-operative Bank. The assessee filed its return of income for the assessment year 2010-11 on 24-09-2010 declaring total income of Rs. 19,41,520/-. During the course of scrutiny assessment, the Assessing Officer made addition of Rs. 24,57,800/- on account of amortization on Government Securities Held to Maturity (HTM). Aggriev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see's own case in ITA No. 2173/PN/2012 for the assessment year 2009-10 decided on 23-09-2013. The relevant extract of the order of Tribunal is as under: "6. We have considered the arguments made by the Ld. Departmental Representative and perused the orders of the Assessing Officer and the CIT(A). We find an identical issue had come up before the Pune Bench of the Tribunal in the case of ACIT Vs. Pune Peoples Cooperative Bank Ltd. We find the Tribunal vide ITA No.1413/PN/2011 order dated 08-08-2013 has rejected the appeal filed by the Revenue wherein the CIT(A) had allowed the claim of the assessee on account of amortization of premium on investments to the tune of Rs. 45,67,178/-. The relevant observations of the Tribunal read as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utions and should pay tax on their profits, Primary Agricultural Credit Societies (PACS) and Primary Cooperative Agricultural and Rural Development Bank (PCARDB) stand on a special footing and will continue to be exempt under section 80P of the Income Tax Act. However, I propose to exclude all other co-operative banks from the scope of that section". Accordingly, section 80P is to be amended to give effect to the above proposal. It is also proposed to amend section 2(24) to provide that profits and gains of business of banking (Including providing credit facilities) carried on by a co-operative society with its members shall be included in the definition of 'income' (with effect from 1st April, 2007)". 6. Cooperative bank unlike ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock-in-trade of a bank and therefore are to be valued at cost or NRV, whichever is less. Fall in value below cost, therefore, is to be provided immediately, however any net appreciation in value is ignored and not recognized as income on the basis of conservatism. 3. HFT The individual scrips in the Held for Trading category will be marked to market at monthly or at more frequent intervals and provided for as in the case of those in the Available for Sale category. 7. In para (vii) of the CBDT Instruction No.17 of 2008 dated 26.11.2008, on 'Assessment of Bank - check list for deduction, states as under: "As per RBI guidelines dated i6th October, 2000, the investment portfolio of the banks is required to be classified under thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 17,91,659/- made by the Assessing Officer by disallowing amount towards amortization of Government Securities (HMT) was deleted. This reasoned factual and legal finding of the CIT(A) needs no interference from our side. We uphold the same. 9. As a result, the appeal filed by the Revenue is dismissed". 8.1 Respectfully following the decision of the Coordinate Bench of the Tribunal and in absence of any contrary material brought to our notice against the above cited decision we find no infirmity in the order of the Ld.CIT(A) deleting the addition. Accordingly, the order of the Ld.CIT(A) is upheld and the grounds raised by the Revenue are dismissed." 6.1 Respectfully following the decision of the Coordinate Bench of the Tribunal and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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