Assistant Commissioner of Income tax, Tumkur V. M/s tumkur Veerashiva Co.operative Bank ltd, Tumkur

ITA 1174/BANG/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95290 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 07-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 11-09-2014
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI
• Keywords: Business income; Depreciation; Business expenditure; Cost of acquisition; Revenue expenditure
• Section: 143(3); 142(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI VIJAYPAL RAO, JUDICIAL MEMBER AND SHRI G MANJUNATHA, ACCOUNTANT MEMBER ITA NO.11 74/BANG/2014 (ASST. YEAR 2010-11) THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, TUMKUR. . APPELLANT VS. M/S TUMKUR VEERASHIVA CO-OPERATIVE BANK LTD., DR. RADHKRISHNA ROAD, SS PURAM, TUMKUR. . RESPONDENT APPELLANT BY : SHRI PK SRIHARI, ADDL. CIT, RESPONDENT BY : SHRI NONE DATE OF HEARING : 08-10-2015 DATE OF PRONOUNCEMENT : 16-10-2015 O R D E R PER G MANJUNATHA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, BANGALORE DATED 1/6/2014 FOR THE ASSESSMENT YEAR 2010-11. ITA NO.1174/B/14 2 2. INITIALLY, THE CASE IS POSTED FOR HEARING ON 19 /3/2015 AND NONE APPEARED FOR THE ASSESSEE. THE CASE IS AGAIN POSTED FOR HEARING ON 7/7/2015 WITH A DIRECTION TO ISSUE NOTICE THROUGH D R HOWEVER, NO RESPONSE FROM THE ASSESSEE. FINALLY, THE CASE IS PO STED FOR HEARING ON 8/10/2015 BUT, NONE APPEARED FOR THE ASSESSEE. THER EFORE, WE PROCEED TO DISPOSE OFF THE APPEAL ON MERITS AFTER HEARING T HE DEPARTMENTAL REPRESENTATIVE. 3. THE BRIEF FACTS OF THE CASE, ARE THAT THE ASSESS EE IS CO-OPERATIVE BANK WHICH IS ENGAGED IN THE BUSINESS OF BANKING, F ILED ITS RETURN OF INCOME FOR THE A.Y. 2010-11 DECLARING TOTAL INCOME OF RS. 2,88,16,767/-. THE CASE WAS SELECTED FOR SCRUTINY A SSESSMENT BY ISSUING STATUTORY NOTICE U/S 143(2) ALONG WITH NOTI CE U/S 142(1) CALLING FOR DETAILS. THE ASSESSING OFFICER COMPLETED THE AS SESSMENT U/S 143(3) AND DETERMINED THE TOTAL INCOME OF RS. 3,30, 70,554/- AFTER MAKING ADDITIONS BEING DISALLOWANCES OF AMOUNT SPE NT OUT OF MEMBERS BENEVOLENT FUND AMOUNTING TO RS. 12,60,537/ - AND MEMBERS DEATH RELIEF FUND AMOUNTING TO RS. 4,60,000/-. BESI DES, THE AO, DISALLOWED THE AMORTISATION OF PREMIUM PAID ON GOVT . SECURITIES OF RS. 9,93,550/-. ITA NO.1174/B/14 3 4. THE REVENUE HAS RAISED THREE GROUNDS. FROM THESE GROUNDS, IT HAS AGITATED TWO ISSUES, VIZ. (I) WHETHER THE CIT(A ) IS RIGHT IN DELETING THE ADDITIONS OF RS. 12,60, 537/- AND RS. 460,000/- RESPECTIVELY, BEING AMOUNT SPENT OUT OF MEMBERS BEN EVOLENT FUND AND MEMBERS DEATH RELIEF FUND. (II) ADDITION OF RS.9,93 ,550/- BEING AMORTISATION OF PREMIUM PAID ON GOVT. SECURITIES. 5. LET US FIRST TAKE UP ISSUE RELATING TO DISALLOW ANCE OF AMOUNTS SPENT ON MEMBER BENEVOLENT FUND AND MEMBERS DEATH RELIEF FUND. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E AO NOTICED THAT THE ASSESSEE CLAIMED DEDUCTION IN THE STATEMEN T OF TOTAL INCOME TOWARDS AMOUNT SPENT ON MEMBERS BENEVOLENT FUND AMO UNTING TO RS. 12,60,537/- AND MEMBERS DEATH RELIEF FUND AMOUNTING TO RS. 4,60,000/-. THE AO QUESTIONED THE DEDUCTIBILITY OF ABOVE SAID EXPENDITURES AND SOUGHT EXPLANATIONS FROM THE ASSES SEE. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE CONTENDED TH AT THE PAYMENTS OUT OF MEMBER BENEVOLENT FUNDS AND MEMBERS DEATH RE LIEF FUND ARE INCURRED FOR BUSINESS PURPOSE AND HENCE DEDUCTIBLE UNDER SECTION 37 OF THE INCOME TAX ACT. THE ASSESSING OFFICER HOWEVE R, DID NOT SATISFIED WITH THE EXPLANATIONS DISALLOWED THE AMOU NT PAID OUT OF ITA NO.1174/B/14 4 MEMBERS BENEVOLENT FUND AMOUNTING TO RS. 12,60,537/ - & MEMBERS DEATH RELIEF FUND AMOUNTING TO RS. 4,60,000/- BY ST ATING THAT, THESE AMOUNTS REPRESENTS THE APPROPRIATION OF PROFIT WHIC H CANNOT BE ALLOWED AS DEDUCTION WHILE COMPUTING THE TAXABLE IN COME. 7. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEA LS)-II, BANGALORE. BEFORE CIT(A), THE ASSESSEE CONTENDED TH AT THE ASSESSEE BEING A CO-OPERATIVE SOCIETY, CREATED VARIOUS FUNDS OUT OF ITS PROFITS AND THESE AMOUNTS ARE PAID OUT OF THESE FUNDS FOR T HE WELFARE OF THE MEMBERS. THE ASSESSEE FURTHER, CONTENDED THAT ULTIM ATELY THESE AMOUNTS ARE EXPENDITURE SPENT OUT OF COFFERS OF THE ASSESSEE SOCIETY FOR THE BENEFIT OF MEMBERS, THEREFORE, INCURRED WHO LLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE. IT WAS FURTHER ARGUED THA T THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING FOR THESE EXPEN DITURES AND CLAIMED AS AND WHEN INCURRED THEREFORE, ALLOWABLE U NDER SECTION 37 OF THE INCOME TAX ACT. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS, DELETE THE IMPUGNED ADDITIONS. WHILE DOING SO, THE CIT(A), HELD THAT, THE CONTRIBUTIONS OF MEMBERS BENEVOLENT FUND AND D EATH RELIEF FUNDS ARE CLEARLY INTENDED FOR THE WELFARE OF THE EMPLOYE ES AND THE FUND IS ITA NO.1174/B/14 5 USED TO PROVIDE ASSISTANCE TO ITS MEMBERS THEREFORE , ALLOWABLE DEDUCTION U/S 37 OF THE INCOME TAX ACT, 1961. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT, THE CIT(A) ERRED IN FACTS TO STATE THAT THESE ARE THE A MOUNTS CONTRIBUTED FOR THE WELFARE OF THE EMPLOYEES, IN FACT FROM THE FACTS IT WAS EMERGED THAT THE DEDUCTION CLAIMED BY THE ASSESSEE WAS TOWA RDS AMOUNT SPENT OUT OF MEMBERS BENEVOLENT FUND AND MEMBERS DEATH RE LIEF FUNDS. HE FURTHER SUBMITTED THAT THESE EXPENDITURE ARE IN THE NATURE OF PERSONAL EXPENDITURE INTENDED FOR THE BENEFIT OF THE MEMBERS OF THE SOCIETY CANNOT BE ALLOWED AS BUSINESS EXPENDITURE DEDUCTIBL E U/S 37 OF THE ACT. 9. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIAL A VAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. ADMITTEDLY, THE ASSESSEE CLAIMED THIS EXPENDITURE O UT OF THE FUNDS EARMARKED FROM THE PROFITS APPROPRIATED. IT IS AN A DMITTED FACT THAT THIS AMOUNT IS NOT CLAIMED BY DEBITING TO ITS INCOM E AND EXPENDITURE STATEMENT. THE ASSESSEE CLAIMED THIS DEDUCTION BY M AKING ADJUSTMENT TO ITS NET PROFIT IN THE STATEMENT OF TOTAL INCOME TO ARRIVE AT INCOME FROM BUSINESS. THE AO WAS OF THE VIEW THAT THIS AMO UNT REPRESENTS ITA NO.1174/B/14 6 THE APPROPRIATION OF PROFITS AND SPENT FROM THE EAR MARKED FUNDS THEREFORE, SHOULD NOT BE ALLOWED AS DEDUCTION FROM THE BUSINESS INCOME. THE ASSESSEE CONTENTION IS THAT THIS AMOUNT WAS INCURRED EXCLUSIVELY FOR THE PURPOSE OF BUSINESS THEREFORE, SHOULD BE ALLOWED AS DEDUCTION WHILE COMPUTING THE BUSINESS PROFITS. WE HAVE GONE THROUGH THE ASSESSMENT ORDER, FACTS OF THE CASE, GR OUNDS OF APPEAL BEFORE THE CIT(A) AND THE ORDER OF THE CIT(A). THE ASSESSEE RIGHT FROM THE BEGINNING CONTENDED THAT THIS AMOUNTS REPR ESENTS THE AMOUNT SPENT OUT OF THE EARMARKED FUNDS AND FOR THE BENEFI T OF THE MEMBERS. BUT, THE FINDINGS OF FACT BY THE CIT(A) STATES THAT THESE AMOUNTS ARE CONTRIBUTED FOR THE WELFARE OF THE EMPLOYEES THEREF ORE, DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER. NO DOUBT, IF ASSESSEE INCURRED THESE AMOUNTS TOWARDS WELFARE OF THE EMPLO YEES, IT SHOULD BE ALLOWED AS BUSINESS EXPENDITURE INCURRED EXCLUSIVEL Y FOR THE BUSINESS, BECAUSE IT DEFINITELY ENHANCE THE PRODUCTIVITY OF T HE EMPLOYEES AND HAS A DIRECT NEXUS BETWEEN EARNING OF INCOME. SIMIL ARLY, IF THESE AMOUNTS ARE INCURRED OUT OF THE EARMARKED FUNDS FOR THE WELFARE OF THE MEMBERS THEN, THE SAME SHOULD BE DEDUCTED FROM THE RESPECTIVE FUND ACCOUNT AND CANNOT BE ALLOWED AS DEDUCTION FROM THE BUSINESS PROFITS, BECAUSE THESE EXPENDITURE ARE IN THE NATURE OF PERS ONAL EXPENDITURES OF MEMBERS OF THE SOCIETY. THOUGH, THE ASSESSEE CLA IMS THAT THIS IS ITA NO.1174/B/14 7 EXCLUSIVELY INCURRED FOR THE BUSINESS, BUT THE AMOU NTS INCURRED FOR THE WELFARE OF THE MEMBERS BUT NOT TO THE STAFF OF THE SOCIETY. 10. IN THE INSTANT CASE, FROM THE FACTS IT IS CLEA RLY SHOWS THAT THE AMOUNT SPENT OUT OF MEMBERS BENEVOLENT FUND AND MEM BERS DEATH RELIEF FUND ARE SPENT FOR THE WELFARE OF THE MEMBER S. IT IS ALSO CLEAR FROM THE FACTS THAT THESE FUNDS ARE CREATED OUT OF APPROPRIATION OF PROFITS. THE KARNATAKA CO-OPERATIVE SOCIETY ACT, 19 59 MANDATES THE SOCIETIES TO APPROPRIATE CERTAIN PERCENTAGE OF ITS PROFIT BEFORE DECLARATION OF DIVIDENDS TO ITS MEMBERS BUT, THE SA ID TWO FUNDS ARE NOT COVERED UNDER THE SAID ACT. THEREFORE, IT IS AMPLY CLEAR THAT THE SAID FUNDS ARE CREATED TO ACHIEVE THE OBJECTS OF THE SOC IETY THROUGH THE BY- LAWS FOR THE WELFARE OF THE MEMBERS OUT OF THE PROF ITS OF THE SOCIETY. THE SOCIETY IS HAVING LIBERTY TO CREATE ANY FUNDS F OR THE WELFARE OF ITS MEMBERS WITHIN THE FRAME WORK OF BY-LAWS BUT, THE I NCOME-TAX ACT DOES NOT PROVIDE FOR ANY DEDUCTION TOWARDS THESE EX PENDITURES UNDER SPECIFIC PROVISIONS. FURTHER, IT CANNOT BE CLAIMED UNDER GENERAL CATEGORY BY VIRTUE OF SECTION 37, BECAUSE IT IS NOT INCURRED EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND ALSO THERE IS AN EL EMENT OF PERSONAL IN NATURE, BECAUSE THE BENEFIT WAS GIVEN TO MEMBERS BE ING OWNERS OF THE SOCIETY. IT IS ALSO ADMITTED FACT THAT THESE DEDUCT IONS ARE CLAIMED IN ITA NO.1174/B/14 8 THE STATEMENT OF TOTAL INCOME WITHOUT ROUTED THROUG H PROFIT AND LOSS STATEMENT OF THE ASSESSEE. IF THIS AMOUNTS ARE INCU RRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE, IT COULD HAVE BEEN CLAIMED IN THE PROFIT AND LOSS ACCOUNT BY DEBITING TO THE CONC ERNED EXPENDITURE ACCOUNT. THEREFORE, WE ARE OF THE OPINION THAT, THE AMOUNT SPENT BY THE ASSESSEE FOR THE WELFARE OF ITS MEMBERS OUT OF THE EARMARKED FUNDS CANNOT BE DEDUCTIBLE AS EXPENDITURE WHOLLY AND EXCL USIVELY INCURRED FOR THE PURPOSE OF BUSINESS. FROM THE FINDINGS OF T HE FACTS, THE CIT(A) DID NOT APPRECIATED THE FACTS CORRECTLY WHILE DELET ING THE IMPUGNED ADDITIONS. THERE IS DIFFERENCE OF FINDINGS OF FACTS IN THE ORDERS OF THE CIT(A). THE ASSESSEE CONTENDS THAT THE AMOUNTS SPEN T OUT OF MEMBERS BENEVOLENT FUND AND MEMBERS DEATH RELIEF FUND BUT, THE CIT(A) STATES THAT THE AMOUNT CONTRIBUTED TO THESE FUNDS ARE FOR THE WELFARE OF THE EMPLOYEES. THUS, THERE IS CLEAR DIFFERENCE BETWEEN FINDINGS OF FACTS BY BOTH THE AUTHORITIES, WHICH NEEDS TO BE RELOOKED BY THE CIT(A). THEREFORE, WE REMIT THE ISSUE BACK TO THE FILE OF T HE CIT(A) IN THE LIGHT OF THE DISCUSSION ABOVE AND DIRECT THE CIT(A) TO CONSIDER THE ISSUE AFTER AFFORDING AN OPPORTUNITY OF HEARING TO THE PARTIES. ITA NO.1174/B/14 9 11. NOW COMING TO THE NEXT ISSUE, I.E. ADDITION OF RS.9,93,550/- BEING DISALLOWANCE OF AMORTISATION OF PREMIUM PAID ON GOVT. SECURITIES. 12. THE BRIEF FACTS OF THE ISSUE ARE THAT, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS. 9,93,550/- UNDER THE HEAD AMORTISATION OF PREMIUM PAID ON GOVT. SECURITIES. IN RESPONSE TO A SPECIFIC QUERY, IT WAS SUBMITTED THAT AS PER THE LAWS APPLICABLE TO CO -OP BANKS, IT NEEDS TO INVEST CERTAIN PORTION OF ITS FUNDS IN SLR SECUR ITIES. TO COMPLY WITH THE STATUTORY REQUIREMENTS, IT HAS PURCHASED G OVT. SECURITIES FROM OPEN MARKET BY PAYING PREMIUM ON FACE VALUE OF THE SECURITIES WHICH WAS AMORTISED OVER THE PERIOD OF SECURITY AS PER TH E CIRCULAR ISSUED BY RBI VIDE CIRCULAR NO. CO.BSD.1.PCB.44/12.02.2005 AN D THIS IS AS PER THE PRESCRIBED METHOD OF ACCOUNTING SUGGESTED B Y THE ICAI AS WELL AS CBDT CIRCULAR NO. 17/2008 DATED 26-08-2008. HOWEVER, THE AO DID NOT CONVINCED WITH THE EXPLANATION, DISALLOW ED THE AMORTISATION OF PREMIUM PAID ON GOVT. SECURITIES AM OUNTING TO RS. 9,93,550/- AND COMPLETED THE ASSESSMENT U/S 143(3). WHILE DOING SO, THE AO WAS OF THE OPINION THAT, THE SECURITIES CLAS SIFIED AS HELD TO MATURITY ARE LONG TERM INVESTMENTS CANNOT BE TREAT ED AS STOCK IN ITA NO.1174/B/14 10 TRADE OF THE ASSESSEE LIKE HELD FOR TRADING OR A VAILABLE FOR SALE THEREFORE, ANY PREMIUM PAID ON PURCHASE OF THESE SE CURITIES SHOULD BE CAPITALISED AS PART OF COST OF ACQUISITION AND CANN OT BE TREATED AS REVENUE EXPENDITURE. IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE JUDGMENTS OF HONBLE SUPREME COURT IN THE CASE OF V IJAYA BANK VS CIT, 187 ITR 541 (SC) AND HONBLE MADRAS HIGH COURT DECISION IN THE CASE OF T.N. POWER FINANCE AND INFRASTRUCTURE D EVELOPMENT CORPORATION LTD VS JCIT (2006) 280 ITR 491 (MAD). 13. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSE E PREFERRED AN APPEAL BEFORE CIT(A). THE LD. CIT(A) AFTER CONSIDER ING THE SUBMISSIONS OF THE ASSESSEE AND ALSO RELIED UPON TH E CO-ORDINATE BENCH DECISION IN ITA.NO. 1122/B/2010 OF SIR.M.VISW ESWARAYA CO- OP BANK LTD., VS. JCIT, HELD THAT THE ASSESSEE IS E LIGIBLE FOR DEDUCTION FOR AMORTISATION OF PREMIUM PAID ON GOVT. SECURITIE S. 14. THE DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPO RTED THE ORDERS OF THE ASSESSING OFFICER AND URGED TO SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE ASSESSMENT ORDER. ITA NO.1174/B/14 11 15. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIAL AVAILABLE ON RECORD AND CONSIDERED THE CASE LAWS RELIED UPON BY THE PARTIES. A. SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE THIS TR IBUNAL. THE CO- ORDINATE BENCH OF THIS TRIBUNAL DECIDED THE ISSUE I N FAVOUR OF THE ASSESSEE IN THE CASE OF SIR.M. VISWESWARAYA CO-OP B ANK LTD., VS. JCIT, IN ITA NO. 1122/B/2010. IN THE SAID CASE, THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS U NDER: 08. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND PERUSED THE RELEVANT FACTS AND MATERIALS ON REC ORD. WE HAVE ALSO CONSIDERED THE FINDINGS OF THE VARIOUS BENCHES OF THE TRIBUNAL, AS UNDER : (I) CATHOLIC SYRIAN BANK LTD V. ACIT (2010) 38 SOT 553 (COCH): AN IDENTICAL ISSUE TO THAT OF THE SUBJECT MATTER UN DER CONSIDERATION HAD ARISEN BEFORE THE COCHIN BENCH. A FTER ANALYZING THE ISSUE IN DEPTH, THE BENCH HAS OBSERVE D THAT WITH REGARD TO AMORTIZATION OF PREMIUM ON PURCHASE OF GOVERNMENT SECURITIES, IT WAS CLARIFIED THAT THIS W AS MADE AS PER THE PRUDENTIAL NORMS OF THE RBI. FOLLOW ING THE TRIBUNAL DECISION IN THE ASSESSEE'S OWN CASE AN D CONSIDERING THAT THE ASSESSEE BANK IS FOLLOWING CONSISTENT AND REGULAR METHOD OF ACCOUNTING SYSTEM, THERE IS NO JUSTIFICATION IN INTERFERING WITH THE O RDER OF ITA NO.1174/B/14 12 THE COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS IS SUE OF AMORTIZATION OF PREMIUM ON GOVERNMENT SECURITIES . UNITED COMMERCIAL BANK V. CIT (1999) 156 CTR (SC) 380 ; (1999) 240 ITR 355 (SC) AND SOUTH INDIAN BANK LTD., (ITA NO.126/COCH/2004, DATED.___ SEPT, 2005 FOLLOWED. (II) THE KHANAPUR CO-OP BANK LTD V. ITO ITANO.141/PNJ/2011, DATED.8.9.2011 : THE HON'BLE BENCH OF PANAJI TRIBUNAL HAD RECORDED I TS FINDINGS THAT '6. LIKEWISE, THE PREMIUM AMORTIZED ATRS.1,78,098/- IS CLAIMED TO BE IN RESPECT OF SECU RITIES HELD UNDER THE CATEGORY 'HELD TO MATURITY'. THE ASS ESSING OFFICER HAS TAKEN THEM AS LONG TERM INVESTMENTS. IN OTHER WORDS, HE HAS ACCEPTED THE ASSESSEE'S CLAIM T HAT THE SECURITIES ARE 'HELD TO MATURITY'. THAT BEING S O AND HAVING REGARD TO THE CBDT INSTRUCTION NO.17 OF 2008 DATED.26.11.2008 AS REPRODUCED HEREIN ABOVE, THE PREMIUM PAID ON SUCH GOVERNMENT SECURITIES IS REQUI RED TO BE AMORTIZED OVER THE PERIOD REMAINING TO MATURI TY .' (III) IN THE CASE OF CORPORATION BANK V. ACIT, M'LO RE INITA.112/BANG/2008(BANG), FOR THE ASSESSMENT YEAR 2004-05,THE EARLIER BENCH HAD ALSO HELD A SIMILAR V IEW. ITA NO.1174/B/14 13 IN THE LIGHT OF THE ABOVE DISCUSSION AND THE CASE L AWS DISCUSSED SUPRA, TAKING INTO ACCOUNT THE TOTALITY O F THE FACTS AND MATERIALS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ENTITLED TO CLAIM THIS DEDUCTION AN D HENCE WE ALLOW THE GROUNDS OF THE ASSESSEE RELATING TO TH IS ISSUE. 15. THEREFORE, RESPECTFULLY FOLLOWING THE CO-ORDIN ATE BENCH OF THIS TRIBUNAL IN ITA NO.1122/BANG/2010 CITED SUPRA, WE A RE OF THE OPINION THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION TOWARDS AMORTISATION OF PREMIUM PAID ON GOVT. SECURITIES. HENCE, WE UPHELD THE CIT(A) ORDER AND DISMISS THE GROUND RAISED BY THE REVENUE. 16. IN THE RESULT, THE REVENUE APPEAL IS PARTLY AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCT, 2015. SD/- SD/- (VIJAYPAL RAO) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER VMS. BANGALORE DATED : 16/10/2015 ITA NO.1174/B/14 14 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE.