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TMI Blog2022 (10) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... rated that assessee has sufficient interest free funds to make investment in tax free bonds/debentures/mutual funds/shares etc. and bank has not incurred any interest expenditure. Thus conclude that the proportionate disallowance of interest is not warranted, u/s 14A of Income Tax Act for investments made in tax free bonds/ securities which yield tax free dividend and interest to Assessee Banks in those situations where, interest free own funds available with the Assessee, exceeded their investments. Amortization of securities premium - HELD THAT:- As decided in CHANASMA NAGRIK SAHAKARI BANK LTD. AND VICE-VERSA [ 2017 (10) TMI 478 - ITAT AHMEDABAD] as notice that the aforesaid amount represents the excess of acquisition cost over the face value of Government securities taken under HTM category. We find that the issue is squarely covered in favour of assessee by the decision of Rajkot Dist. Co-op Bank Ltd. [ 2014 (3) TMI 110 - GUJARAT HIGH COURT] placed reliance upon the CBDT Circular No. 17 of 2008 and held that loss on account of premium paid on the face value of the security is required to be amortized for the remaining period of maturity. Disallowance of loss on sale of obsolete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y items of Rs. 54,860/- aggregating to Rs. 57,21,000/-. 3. Apropos issue relating to Ground No. 1 : In this ground, the assessee has alleged that ld. CIT (A) has passed the order in the name of Haryana Gramin Bank (now Sarva Haryana Gramin Bank). It is the contention of the assessee that the appellate order has been passed in the case of a bank which is no longer in existence, hence the appellate order is void ab initio. 4. We find that there is no grievance of the assessee regarding the name in which assessment order has been passed. The same has been duly passed under M/s. Sarva Haryana Gramin Bank. It is the cause title of ld. CIT (A) s order wherein it is mentioned Haryana Gramin Bank (now Sarva Haryana Gramin Bank). In our considered opinion, in these circumstances, the ld. CIT (A) s appellate order is not liable to be quashed as void ab initio. This is a clerical mistake which does not make the ld. CIT (A) s order void ab initio. Accordingly, ground no.1 stands dismissed. 5. Apropos ground relating to disallowance u/s 14A : On this issue, AO noted that assessee has made investment in tax free bonds/debentures, mutual funds, shares etc. which yielded tax free dividend and tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material available on record. We find merit into the contentions of the Ld. Counsel for the assessee that Ld.CIT (A) has misdirected himself by wrongly applying the ratio of the judgement of Hon ble Supreme Court in the case of Maxopp Investment Ltd. vs CIT (supra). Infact, the judgement of Hon ble Supreme Court in the case of Maxopp Investment Ltd. (supra) supports the case of the assessee. Moreover, the Hon ble Apex Court in later judgement rendered in Civil Appeal No. 9606 of 2011 in the case of South Indian Bank Ltd. vs CIT after considering the judgement rendered in the Maxopp Investment Ltd. (supra) clarified as under:- 25. Proceeding now to another aspect, it is seen that the Central Board of Direct Taxes (CBDT) had issued the Circular no. 18 of 2015 dated 02.11.2015, which had analyzed and then explained that all shares and securities held by a bank which are not bought to maintain Statutory Liquidity Ratio (SLR) are its stock-in-trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. wherein this Court had held that investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tury economist, it needs to be observed here that in taxation regime, there is no room for presumption and nothing can be taken to be implied. The tax an individual or a corporate is required to pay, is a matter of planning for a tax payer and the Government should endeavour to keep it convenient and simple to achieve maximization of compliance. Just as the Government does not wish for avoidance of tax equally it is the responsibility of the regime to design a tax system for which a subject can budget and plan. If proper balance is achieved between these, unnecessary litigation can be avoided without compromising on generation of revenue. 30. In view of the forgoing discussion, the issue framed in these appeals is answered against the Revenue and in favour of the assessee. The appeals by the Assessees are accordingly allowed with no order on costs. Respectfully following the above-referred judgement of Hon ble Supreme Court, we hereby direct the Assessing Officer to delete the addition. 11. We find that in assessee s own case on the similar issue, ITAT has deleted the addition. It is not the case that Hon ble jurisdictional High Court has reversed the said decision. Hence, followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars also and this practice had been duly disclosed in Schedule 17. It is further contended that the Assessing Officer wrongly interpreted the CBDT Circular No. 17 dated 26.11.2008. However, Ld.CIT (A) did not accept the contention of the assessee and sustained the addition. He contended that law is well settled law that amortization premium is in the nature of revenue expenditure and hence, allowable. In support of this, Ld. Counsel for the assessee placed reliance on various judicial pronouncements. 13. On the contrary, Ld. Sr. DR opposed these submissions and supported the orders of the authorities below. 14. We have heard the rival contentions and perused the material available on record. The Co-ordinate Bench of this Tribunal in ITA No. 1334/Ahd/2014 Others in the case of The Chanasma Nagrik Sahakari Bank Ltd. vs ACIT decided the identical issue by observing as under:- 15. As regards claim of amortization of securities premium amounting to Rs. 1,91,690/-, we notice that the aforesaid amount represents the excess of acquisition cost over the face value of Government securities taken under HTM category. We find that the issue is squarely covered in favour of assessee by the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on said expenses and failed to produce/furnish copy of any vouchers, bills, supporting the same for verification and to prove beyond doubt that the said loss was incurred for business purpose and it was of revenue in nature. Ld. CIT (A) observed that during appellate proceedings, assessee has not furnished any evidence which can show that addition made by the AO is unjustified. He noted that in the remand report, AO stated that assessee has failed to submit any documentary evidence. He also referred to AO s finding that the said loss on sale of SFF items was of capital in nature and not revenue in nature. Accordingly, he confirmed the addition. 20. Against this order, assessee is in appeal before us. We have heard both the parties and perused the record. 21. In the submissions, assessee has stated that AO has noted that these are loss on account of lost stationery and related items but AO has treated it as capital loss. It has been mentioned that erstwhile Gurgaon Gramin Bank and Erstwhile Haryana Gramin Bank were amalgamated into a single bank, namely, Sarva Haryana Gramin Bank vide Govt. of India Notification dated 29.11.2013. As such, printed stationery in the name of Erstwhile ..... 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