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TMI Blog2024 (12) TMI 1484X X X X Extracts X X X X X X X X Extracts X X X X ..... e is now well settled that amount paid towards amortization of premium on securities held to maturity is an allowable deduction. We see no infirmity in the findings of the CIT(A) deleted addition as relying on HDFC Bank Ltd. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT ] and in the case of ACIT vs. The Bank of Rajasthan Ltd. [ 2010 (12) TMI 894 - ITAT, MUMBAI ] Revision for Standard Assets - HELD THAT:- Revenue has not been able to controvert the statement of ld. Counsel for the assessee that in preceding and succeeding assessment years where assessments were completed u/s.143(3) of the Act, the claim of the assessee has been accepted by the AO. The rule of consistency demands that where the assessee has claimed an expenditure following the same accounting policy in preceding and succeeding assessment years and the same has been accepted, no disallowance should be made in one of intervening assessment years. Provision for Fraud - HELD THAT:- In preceding assessment year, the CIT(A) decided this issue in favour of the assessee by placing reliance on various case laws and CBDT Circular no. 35DXLVII-20 dated 24.04.1965. We find no infirmity in the order of CIT(A) on this issue, hence, we se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)'). The impugned orders by the CIT(A) for the respective assessment years are of even date i.e. 30.03.2023. These appeals are taken up together for adjudication as they emanate from identical set of facts and are decided by this common order. 2. For the sake of convenience the appeals are decided in seriatim of assessment year. Appeal for assessment year 2016-17 is taken up as a lead case, hence, the facts are narrated from said appeal. ITA No. 1820/Del/2023 for AY 2016-17 3. The Revenue in appeal has raised as many as 16 grounds. The grounds of appeal are summed up as under: Ground no. 1 to 3: Against deleting of disallowance u/s. 14 r.w.r 8D. Ground no. 4 to 6: Against deleting of addition on account of amortization of premium. Ground no. 7 to 9: Against deleting of provisions for Standard Assets u/s. 36(1)(viia) of the Income Tax Act, 1961(hereinafter referred to as the Act ). Ground no. 10: Against deleting of addition on account of fraud/dacoity. Ground no. 11 to 13: Against deleting of addition on account of disallowance of claim of deduction u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds. Thus, in light of settled legal position, we find no infirmity in findings of the CIT(A) on this issue, hence, ground no. 1 to 3 of appeal are dismissed. Amortization of Premium Paid on Securities: 6. The assessee has amortized the premium paid on purchase of securities over remaining period of securities. The assessee has claimed amount paid on amortization in the P L account. The AO disallowed assessee s claim of amortization on securities held to maturity and made addition of Rs. 2,35,11,091-/. In first appeal, the CIT(A) deleting the addition following decisions rendered in the case of CIT(A) vs. HDFC Bank Ltd. 366 ITR 105 (Bom) and in the case of ACIT vs. The Bank of Rajasthan Ltd. (2011) TIOL 35 (ITAT Mumbai). The issue is now well settled that amount paid towards amortization of premium on securities held to maturity is an allowable deduction. We see no infirmity in the findings of the CIT(A) on this issue, hence, the same are upheld and ground no. 4 to 6 are dismissed. Revision for Standard Assets: 7. The assessee has claimed provision for Standard Assets amounting to Rs. 1,76,56,000/-. The AO placing reliance on the decision of Hon ble Apex Court in the case of Southe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has furnished a copy of FIR lodged to substantiate loss caused due to fraud during the year. The AO rejected assessee's claim merely on the ground that assessee did not submit any calculation in support. In First Appellate proceedings, the CIT(A) deleted the addition following the order of CIT(A) in assessee's own case in AY 2014-15. The ld. DR supporting findings of the AO submitted that no reasons for fraud were explained by the assessee nor any details of recovery of amount involved in fraud in subsequent assessment year is furnished by the assessee. 8.1. The ld.AR vehemently supporting the order of CIT(A) submitted that reasons for fraud are given in FIR, copy of which was provided to the AO. He further made statement at Bar that as and when the amount lost in fraud is recovered, the same is offered to tax in the year of recovery. 8.2. Both sides heard, it is an undisputed fact that in support of the claim towards provision for fraud, the assessee had furnished a copy of the FIR. The AO rejected assessee s claim merely for the reason that assessee has not submitted any calculation in support of the claim. The CIT(A) while deleting the addition has referred to the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1982, which specifically stated that the provision of section 80P of the Act will also be applicable to Regional Rural Banks. Hence, deduction u/s. 80P(2)(a)(i) of the Act is allowable in respect of the RRB's. Taking into consideration entire facts and decision on which the CIT(A) has placed reliance, we see no reason to interfere with the findings of the CIT(A). Hence, ground no. 11 to 13 are dismissed. Disallowance of expenses claimed under Estab-PNB : 10. The assessee has claimed establishment expenses to the tune Rs. 1,69,97,505/- towards staff deputed from sponsor bank i.e. PNB. The ld. Counsel submitted that the said establishment expenditure was incurred during the course of business of the assessee. The books of the assessee are subject to audit and the Auditors have not raised any objection in respect of the said expenditure claimed. The AO has not rejected assessee's books of account but has merely disallowed the expenditure on surmises and conjectures. After examination of assessment order, we find that the expenditure is claimed under the sub-heads like EPF, Medical Aid, LFC, Gratuity, etc. The AO has disallowed the claim as the assessee has failed to submit an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no. 15 16 of appeal are dismissed being without any merit. 12. In the result, appeal of Revenue is partly allowed for statistical purpose. ITA No. 1821/Del/2023 for AY 2017-18 13. The gist of issues raised in grounds of appeal by the Revenue in the impugned assessment year is as under: Ground no. 1 to 3: Against disallowance u/s. 14A r.w.r 8D Ground no. 4 to 6: Against amortization of premium. Ground no. 7: Against provisions for fraud/dacoity. Ground no. 8 to 10: Against deduction u/s. 80P of the Act. 14. During the period relevant to assessment year under appeal, the assessee had made investment in tax free securities/mutual fund amounting to Rs. 107,15,568/-. The assessee made suo moto disallowance of Rs. 5,85,676/- u/s. 14A of the Act. The AO not being satisfied with the suo moto disallowance made by the assessee recomputed disallowance u/s.14A r.w.r. 8D at Rs. 63,06,563/-. In first appeal, the CIT(A) following the order of Tribunal in assessee's own case for AY 2014-15 in ITA No. 1984/Del/2019 decided on 19.10.2022 deleted the addition. We have already dealt with this issue while adjudicating appeal of the assessee for AY 2016-17. Both sides are unanimous in stating tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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