Asst. Commissioner of Income tax, Panaji V. M/s Goa Urban Co. Opp. Bank Ltd., Panaji

ITA 13/PAN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93495 (ITAT-PANAJI)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANGARI LD
• Assessee Lawyers: CHINMAY S KAMAT; SHAM J KAMAT
• Keywords: Depreciation
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI GEORGE MATHAN , HONBLE JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, HON'BLE ACCOUNTANT MEMBER ITA N O . 13 /PNJ/20 13 : (A.Y 2009 - 10 ) ACIT, CIRCLE - 1(1), PANAJI, GOA ( APPELLANT) VS. M/S. GOA URBAN CO - OP. BANK LTD., 2 ND FLOOR, HEAD OFFICE BLDG., DR. A.B. ROAD, PANAJI (RESPONDENT) PAN : AAAAT1027F ASSESSEE BY : SHAM J. KAMAT, CA & CHINMAY S. KAMAT, CA REVENUE BY : M.R. BANGARI, LD. DR DATE OF HEARING : 08 / 06 /201 5 DATE OF PRONOUNCEMENT : 08 / 06 /201 5 O R D E R PER GEORGE MATHAN : 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A), PANAJI IN APPEAL NO. 347/PNJ/11 - 12/JCIT, RANGE - 1, PANAJI DT. 31.10.2012 FOR A.Y 2009 - 10. SHRI M.R. BANGARI , LD. DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI SHAM J. KAMAT, CA & SHRI CHINMAY S. KAMAT, CA REPRESENTED ON BEHALF OF THE ASSESSEE. 2. IN RESPECT TO GROUND NO. 1 IT WAS SUBMITTED BY THE LD. DR THAT THE ISSUE WAS AGAINST THE ACTION OF LD. CIT(A) IN ALLOWING LOSS OF RS. 52,92,517/ - ON THE RECATEGORISATION OF SECURITIES HELD FOR TRADING / AVAILABLE FOR SALE TO HELD TILL MATURITY CATEGORY. IT WAS THE SUBMISSION THAT THE LOSS WAS ONLY NOTIONAL ON ACCOUNT OF THE RE - CLASSIFICATION AND LOSS HAD NOT BEEN INCURRED NOR ACTUALLY RESULTED. 2 ITA NO. 13/PNJ/2013 (A.Y : 2009 - 10) 3. IN REPLY, THE LD. AR SUBMITTED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE COORDINATE PUNE BENCH OF ITAT IN THE CASE OF KALLAPPANNA AWADE ICHALKARANJI JANATA SAHAKARI BANK LTD. IN ITA NO. 449/PNJ/2012 D T. 5.8.2013 WHEREIN THE COORDINATE BENCH HAS FOLLOWED THE DECISION IN THE CASE OF NASHIK MERCHANT COOPERATIVE BANK LTD. IN ITA NO. 1254/PN/2011 DT. 29.4.2013 WHEREIN IT WAS HELD THAT THE CO - OPERATIVE BANKS ARE SUBJECT TO DUAL CONTROL FROM BOTH THE RBI AS W ELL AS FROM THE STATE CO - OPERATIVE DEPARTMENT AND AS PER THE RBI GUIDELINES, THE INVESTMENT PORTFOLIO OF THE BANK IS REQUIRED TO BE CLASSIFIED UNDER CATEGORIES HELD TILL MATURITY , HELD FOR TRADING AND AVAILABLE FOR SALE AND CONSEQUENTLY, IN VIEW OF THE CB DT CIRCULAR NO. 17 OF 2008 DT. 26.11.2008, PARA (VII) THE LOSS IS LIABLE TO BE ALLOWED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. RESPECTFULLY FOLLOWING THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF KALLAPPANNA AWADE ICHALKARAN JI JANATA SAHAKARI BANK LTD. ( SUPRA ) AND AS IT IS NOTICED THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THE PUNE BENCH ON THE ISSUE AS ALSO THE INSTRUCTIONS ISSUED BY THE CBDT REFERRED TO SUPRA, THE FINDING OF THE LD. CIT(A) ON THIS ISSUE STANDS CONFIRM ED. 5. IN RESPECT OF GROUND NO. 2 IT WAS THE SUBMISSION BY THE LD. DR THAT THE GROUND WAS AGAINST ACTION OF LD. CIT(A) IN ALLOWING DEPRECIATION ON BATTERIES OF UPS @ 60% TREATING THE SAME AS PART OF COMPUTER. HE VEHEMENTLY SUPPORTED THE ORDER OF THE AO . 6. IN REPLY, THE LD. DR SUBMITTED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ORIENT CERAMICS & INDS. LTD. IN ITA NO. 66 OF 2011 WHEREIN THE HON'BLE DELHI HIGHCOURT HAS CATEGORICALLY HELD THAT UPS FOR COMPUTERS ARE ELIGIBLE FOR DEPRECIATION @ 60%. 3 ITA NO. 13/PNJ/2013 (A.Y : 2009 - 10) 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ORIENT CERAMICS & INDS. LTD. ( SUPRA ), R ESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ORIENT CERAMICS & INDS. LTD. ( SUPRA ), THE FINDING OF THE LD. CIT(A) STANDS CONFIRMED. 8. IN RE SPECT OF GROUND NO. 3 IT WAS SUBMITTED BY THE LD. DR THAT THE ISSUE WAS AGAINST ACTION OF LD. CIT(A) IN ALLOWING THE ASSESSEES CLAIM REGARDING DISALLOWANCE MADE BY THE AO U/S 14A R.W.R 8D. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD USED BORROWED FUNDS FOR MAKING INVESTMENTS IN MUTUAL FUNDS WHICH GAVE RISE TO DIVIDEND INCOME WHICH WAS EXEMPT FROM TAXATION. 9. IN REPLY, THE LD. AR DREW OUR ATTENTION TO THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LTD. IN ITA NO. 330 OF 2012 WHEREIN IT HAS BEEN HELD THAT WHERE SHARE CAPITAL, PROFIT RESERVES , SURPLUS AND CU RRENT ACCOUNT DEPOSITS WERE HIGHER THAN THE INVESTMENTS IN TAX FREE SECURITIES, IT WOULD HAVE TO BE PRESUMED THAT THE INVESTMENT MADE BY THE ASSESSEE WOULD BE OUT OF INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE AND NO DISALLOWANCE WAS WARRANTED U/S 14A. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN THE PRESENT CASE, THE ASSESSEE HAS ITS OWN FUNDS OF RS. 82.16 CRORES WHICH IS THE CAPITAL PLUS RESERVES AS AGAINST THE BOOK INVESTMENTS IN MUTUAL FUNDS DURING THE YEAR AT RS. 15.70 CRORES . CONSEQUENTLY, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LTD. IN ITA NO. 330 OF 2012, THE FINDING OF LD. CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO BY INVOKING THE PROVISIONS OF SEC. 14A R.W.R. 8D STANDS CONFIRMED. 4 ITA NO. 13/PNJ/2013 (A.Y : 2009 - 10) 11. IN RESPECT OF GROUND NO. 4 IT WAS SUBMITTED BY THE LD. DR THAT THE ISSUE WAS AGAINST THE ACTION OF LD. CIT(A) IN ALLOWING ASSESSEES CLAIM AGAINST DISALLOWANCE OF AMORTIZATION OF PREMIUM OF GOVERNMENT SECURITIES. IT WAS THE SUBMISSION THAT THE PREMIUM PAID BY THE ASSESSEE FOR THE PURCHASE OF GOVERNMENT SECURITIES IS NOT AN ALLOWABLE EXPENDITURE. IT WAS THE SUBMISSION THAT THE ORDER O F THE LD. CIT(A) WAS LIABLE TO BE REVERSED. 12. IN REPLY, THE LD. AR SUBMITTED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF KALLAPPANNA AWADE ICHALKARANJI JANATA SAHAKARI BANK LTD. ( SUPRA ) WHEREIN IT HAS BEEN HELD THAT THE AMORTIZATION OF PREMIUM ON PURCHASE OF GOVERNMENT SECURITIES WAS MADE AS PER PRUDENTIAL NORMS OF THE RBI AND SAME WAS AN ALLOWABLE DEDUCTION. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THIS ISSUE IS S QUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN KALLAPPANNA AWADE ICHALKARANJI JANATA SAHAKARI BANK LTD. ( SUPRA ), RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL, THE FINDING OF THE LD. CIT(A) ON THI S ISSUE STANDS CONFIRMED. 14. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/06/2015. S D / - (N.K. BILLAIYA) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 0 9 /06/ 201 5 *SSL* 5 ITA NO. 13/PNJ/2013 (A.Y : 2009 - 10) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 6 ITA NO. 13/PNJ/2013 (A.Y : 2009 - 10) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 08/06/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 09/06/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER /06/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER /06/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 0 9 /06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 08/06/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 0 9 /06/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER