ACIT, Panvel Circle, Panvel V. Alibaug Co-operative Urban Bank Ltd., Raigad

ITA 2173/PUN/2012

• Counselvise Citation: 217324514 RSA 2012
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BANK EMPLOYEE
• Keywords: Capital asset; Business income; Depreciation; Cost of acquisition; Revenue expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 2173/PN/2012 (ASSESSMENT YEAR 2009-10) ASST. CIT, PANVEL CIRCLE, PANVEL, DIST : RAIGAD .. APPELLANT VS. ALIBAG COOPERATIVE URBAN BANK LTD., MAHARSHI KARVE ROAD, ALIBAUG, DIST : RAIGAD .. RESPONDENT PAN NO. AAAJA0261F APPELLANT BY : SHRI RAJESH DAMOR RESPONDENT BY : BANK EMPLOYEE DATE OF HEARING : 19-09-2013 DATE OF PRONOUNCEMENT : 23-09-2013 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 13-08-2012 OF THE CIT(A)-I, THANE RELATING TO ASSESSMENT YEAR 2009-10. 2. AN ADJOURNMENT APPLICATION HAS BEEN FILED BY THE REPRESENTATIVE OF THE BANK. HOWEVER, CONSIDERING THE FACT THAT IT IS A COVERED MATTER, THE ADJOURNMENT PETITION IS REJECTED AND THE APPEAL IS BEING DISPOSED OF ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 2 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT AN AMOUNT OF RS.24,57,800/- HAS BEEN DEBITED IN THE PROFIT AND L OSS ACCOUNT ON ACCOUNT OF AMORTISATION ON GOVERNMENT SECURITIES. THE DEDU CTION CLAIMED FOR AMORTISATION AMORTIZATION OF PREMIUM ON INVESTMENT IN GOVT. SECURITIES (HELD TO MATURITYHTM) REPRESENTS THE E XCESS OF ACQUISITION COST OVER THE FACE VALUE OF HTM SECURITIES WHICH IS AMORTISED BY THE BANKS AS PER THE DIRECTIVES OF RESERVE BANK OF INDI A. 3.1 THE ASSESSING OFFICER NOTED THAT THE RBI HAS IS SUED GUIDELINES IN RESPECT OF INVESTMENT PORTFOLIO OF THE BANKS VIDE M ASTER CIRCULAR PRUDENTIAL NORMS FOR CLASSIFICATION, VALUATION AND OPERATION OF INVESTMENT PORTFOLIO BY BANKS VIDE RBI NO.2004-05/5 1 DBOD NO. BP.BC.11/21.04.141/2004-05 DATED 17/07/2004. HE CA ME TO THE CONCLUSION THAT THE AVAILABLE FOR SALE (AFS) AND HE LD FOR TRADING (HFT) SECURITIES ARE IN THE NATURE OF STOCK IN TRA DE WHILE THE HTM SECURITIES ARE IN THE NATURE OF CAPITAL ASSETS. HENCE, FOR THE PURPOSE OF INCOME TAX, FOR THEIR VALUATION AT YEAR END, THE AF S AND HFT SECURITIES ARE TO BE VALUED AT COST OR MARKET, WHICHEVER IS L ESS PRINCIPLE, WHEREAS THE HTM SECURITIES WHICH REPRESENT INVESTMENTS IN C APITAL ASSET HAVE TO BE VALUED AT COST ONLY AND NOT AT COST OR MARKET W HICHEVER IS LESS OR ANY OTHER PRINCIPLE. HE, THEREFORE, ASKED THE ASSE SSEE TO EXPLAIN AS TO WHY THE AMORTIZATION EXPENSES OF RS.24,57,800/- DEB ITED TO THE PROFIT AND LOSS ACCOUNT SHOULD NOT BE DISALLOWED BEING CA PITAL EXPENDITURE. IN RESPONSE TO THE SAME, THE ASSESS REPLIED AS UNDER : 3 'THAT IN THE EARLIER A Y 2008-09, YOUR HONOUR HAS DISALLOWED THE PROVISION FOR AMORTISATION ON HTM SECURITIES AMOUNTING TO RS.24,57,800/- VIDE YOUR AO U/S. 143(3) DATED 26/10/2010. OUR BANK HAS FILED APPEAL WITH THE CIT(A)-I, THANE AGAINST SUCH DISALLOWANCE AND T HE DECISION IS AWAITED. HOWEVER, WE ARE CONFIDENT THAT CIT(A) DECISION WOULD BE IN OUR FAVOUR, BECAUSE CIT (A) HAS ALLOWED SUCH DEDUCTION/CLAIM/ALLOWANCE IN THE C ASE OF BHARAT SAHAKARI BANK LTD, WHICH IS KNOWN TO YOUR HO NOUR. WE UNDERSTAND THAT RECENTLY, IT AT, MUMBAI BENCH HA S ALLOWED SUCH CLAIM OF AMORTISATION IN ONE OF THE CA SE. WE MAY BE ALLOWED TO FURNISH COPY OF ORDER SUCH CLAIM OF AMORTISATION IN ONE OF THE CASE. WE MAY BE ALLOWED TO FURNISH COPY OF THE ORDER OF IT AT, MUMBAI BENCH, I N DUE COURSE OF TIME. WE, THEREFORE, REQUEST YOU NOT TO D ISALLOW SAID CLAIM FOR AMORTIZATION AMOUNTING TO RS. 24,57, 800/-'. 3.2 HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIE D WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED THA T ALTHOUGH THE ASSESSEE HAS COMPLIED WITH THE DIRECTIVES OF RBI AS REGARDS TO THE VALUATION OF SECURITIES AND ITS AMORTIZATION, HOWEV ER, THE CLAIM OF THIS EXPENDITURE IS IN THE NATURE OF CAPITAL EXPENDITUR E. THESE ARE THE EXPENSES REPRESENTING AMORTIZATION OF THE PREMIUM O N HTM WHICH IS AN ASSET IN THE NATURE OF CAPITAL ASSET. HENCE, THI S EXPENDITURE CANNOT BE CLAIMED AS REVENUE EXPENDITURE IN COMPUTING TOTAL I NCOME. REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE AND OBSERVING THAT THE ASSESSEE HAS NOT FURNISHED THE COPY OF THE DECISION OF THE ITAT, MUMBAI THE ASSESSING OFFICER DISALLOWED THE CLAIM AND MADE ADD ITION OF RS.24,57,800/-. 4. IN APPEAL THE LD.CIT(A) DELETED THE ADDITION MAY BY THE ASSESSING OFFICER BY HOLDING AS UNDER : 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD AND SUBMISSION OF THE A.R. I FIND THAT THE APPELLANT HAS MADE INVE STMENT IN THE GOVERNMENT SECURITIES OF HELD TO MATURITY (HTM) CAT EGORY AS PER THE 4 REQUIREMENT OF SLR. MOREOVER, THE BANKING BUSINESS INCLUDES INVESTMENT IN THE SECURITIES ALSO. THE A.O HAS NOT RECORDED ANY FINDINGS TO INDICATE THAT THE INTEREST INCOME THERE ON HAS NOT BEEN SHOWN AS BUSINESS INCOME OR ON MATURITY OF SUCH SEC URITIES THE ASSESSEE HAS CLAIMED CAPITAL LOSS AFTER AVAILING TH E BENEFIT ON INDEXATION. SINCE THE INVESTMENT IN THE GOVERNMENT SECURITIES OF HTM CATEGORY IS MADE IN THE NORMAL COURSE OF BUSINE SS OF BANKING AND PARTICULARLY TO COMPLY WITH THE REQUIREMENT OF SLR, I HOLD THAT THE GOVERNMENT SECURITIES PURCHASED ON PREMIUM BY T HE APPELLANT ARE IN THE NATURE OF STOCK-IN-TRADE. 4.1 IT IS ALSO NOTICED THAT INVESTMENT IN THE GOV ERNMENT SECURITIES OF HTM CATEGORY IS IN ACCORDANCE WITH THE GUIDELINE S ISSUED BY RBI FROM TIME TO TIME AND AS PER THE LATEST GUIDELINES IN THIS REGARD ISSUED VIDE MASTER CIRCULAR NO. DBOD.BP.BC.15/21.04 . 141/2007-08 DT. 2 ND JULY, 2007. PARA 3 OF THIS CIRCULAR, WHICH IS IN R ESPECT OF VALUATION OF HTM CATEGORY, IS REPRODUCED AS UNDER: 3. VALUATION 3.1 HELD TO MATURITY II) INVESTMENTS CLASSIFIED UNDER HTM NEED NOT BE M ARKED TO MARKET AND WILL BE CARRIED AT ACQUISITION COST, UNL ESS IT IS MORE THAN THE FACE VALUE, IN WHICH CASE THE PREMIUM SHOULD BE AMORTISED OVER THE PERIOD REMAINING TO MATURITY. THE BANKS SHOULD REFLECT THE AMORTISED AMOUNT IN 'SCHEDULE 13 INTEREST EARNED: ITEM II - INCOME ON INVESTMENTS', AS A DEDUCTION. HOWEVER, THE DEDUCTION NEED NOT BE DISCLOSED SEPARATELY. THE BOOK VALUE OF THE SECU RITY SHOULD CONTINUE TO BE REDUCED TO THE EXTENT OF THE AMOUNT AMORTISED DURING THE RELEVANT ACCOUNTING PERIOD. II) BANKS SHOULD RECOGNIZE ANY DIMINUTION, OTHER TH AN TEMPORARY, IN THE VALUE OF THEIR INVESTMENTS IN SUBSIDIARIES/JOIN T VENTURES, WHICH ARE INCLUDED UNDER HTM AND PROVIDE THEREFORE SUCH D IMINUTION SHOULD BE DETERMINED AND PROVIDED FOR EACH INVESTME NT INDIVIDUALLY.' KEEPING IN VIEW THE RBI GUIDELINES, CBDT VIDE INSTR UCTION NO. 17 OF 2008 DT. 26.11.2008 HAD ISSUED A CHECK LIST FOR DEDUCTIONS IN RESPECT OF ASSESSMENT OF BANKS AND PARA 2(VII) PERTAINS TO AMORTIZATION OF PREMIUM ON INVESTMENT IN THE GOVERNMENT SECURITIES OF HTM CATEGORY AND FOR THE SAKE OF CONVENIENCE THE SAME I S REPRODUCED AS UNDER:- 'CLAUSE NO. 2(VII) ' AS PER RBI GUIDELINES DATED 16TH OCTOBER, 2000, THE INVESTMENT PORTFOLIO OF THE BANKS IS REQUIRED TO BE CLASSIFIED UNDER THREE CATEGORIES VIZ. HELD TO MATURITY (HTM), HELD FOR TR ADING (HFT) AND AVAILABLE FOR SALE (AFS). INVESTMENTS CLASSIFIED UN DER HTM CATEGORY 5 NEED NOT BE MARKED TO MARKET AND ARE CARRIED AT ACQ UISITION COST UNLESS THESE ARE MORE THAN THE FACE VALUE, IN WHICH CASE THE PREMIUM SHOULD BE AMORTISED OVER THE PERIOD REMAINI NG TO MATURITY. IN THE CASE OF HFT AND AFS SECURITIES FORMING STOC K IN TRADE OF THE BANK, THE DEPRECIATION/APPRECIATION IS TO BE AGGREGATED SCRIP WISE AND ONLY NET DEPRECIATION, IF ANY, IS REQUIRED TO BE PROVIDED FOR IN THE ACCOUNTS. THE LATEST GUID ELINES OF THE RBI MAY BE REFERRED TO FOR ALLOWING ANY SUCH CLAIMS.' 4.2 IN VIEW OF THE ABOVE DISCUSSION, RBI GUIDELIN ES AND INSTRUCTION OF CBDT, IT IS CRYSTAL CLEAR THAT AMORTIZATION OF P REMIUM PAID ON HTM CATEGORY OF GOVERNMENT SECURITY IS AN ASCERTAINED B USINESS EXPENDITURE AND HENCE THE SAME IS ALLOWABLE AS PER THE PROVISIONS OF INCOME-TAX ACT. ACCORDINGLY, I HOLD THAT THE APPELL ANT HAS RIGHTLY CLAIMED THE DEDUCTION ON ACCOUNT OF AMORTIZATION OF PREMIUM PAID ON GOVERNMENT SECURITIES HELD UNDER THE CATEGORY OF HTM. THE A.O IS DIRECTED TO ALLOW THE RELIEF TO THE APPELLANT. THUS , APPELLANT SUCCEEDS IN THIS REGARD. ALL THE GROUNDS OF APPEAL FROM 1 TO 4 RAISED BY THE APPELLANT ARE ACCORDINGLY, DISPOSED OF. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A)-I, THANE HAS ERRED IN APPRECIATING THE FACT THAT THE S ECURITIES UNDER THE CATEGORIES OF HTM ARE IN THE NATURE OF CAPITAL ASSE T AND HENCE PREMIUM PAID THEREON IS NOT ALLOWABLE EXPENDITURE. 2. THE APPELLANT PRAYS THE ORDER OF THE LD.CIT(A)-I , THANE, MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, OR ALT ER ANY GROUND/GROUNDS, WHICH MAY BE NECESSARY. 6. WE HAVE CONSIDERED THE ARGUMENTS MADE BY THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE ORDERS OF THE ASSES SING OFFICER AND THE CIT(A). WE FIND AN IDENTICAL ISSUE HAD COME UP BEF ORE THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. PUNE PEOPLE S 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 REVENU E WHEREIN THE CIT(A) HAD ALLOWED THE CLAIM OF THE ASSESSEE ON ACC OUNT OF AMORTIZATION 6 OF PREMIUM ON INVESTMENTS TO THE TUNE OF RS.45,67,1 78/-. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL READ AS UNDER : 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND AN IDENTICAL IS SUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF NAHSIK MERCHANT COOPERATIVE BANK LTD. (SUPRA). WE FIND THE TRIBUNAL HAS DISCUSSED THE ISSUE AND DISMI SSED THE GROUNDS RAISED BY THE REVENUE BY HOLDING AS UNDER : 4. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATE RIAL ON RECORD WE FIND THAT WITH THE ADVENT OF SECTION 80P(4) W.E.F. A.Y, 2007-08 HAS CLOSED THE DOORS FOR COOPERATIVE BANKS FOR CLAIMING THE BE NEFIT OF DEDUCTION U/S.80P(2)(A)(I) FROM THIS TOTAL INCOME. HOWEVER, T HE COOPERATIVE SOCIETY SHOULD NOW BE ENTITLED TO BE ASSESSED AS NO RMAL BANKING COMPANY. THE CLAUSE (4) INSERTED IN SECTION 80P HAS TAKEN AWAY THE BENEFIT OF THE ERSTWHILE DEDUCTION AVAILABLE TO COO PERATIVE SOCIETY IN CARRYING ON BUSINESS OF BANKING OR PROVIDING CREDIT FACILITY TO ITS MEMBERS. THE NEW CLAUSE (4) INSERTED BY THE FINANCE ACT, 2006 W.E.F. 01-04-2007 READS AS UNDER : ' THE PROVISION OF THE SECTION WAS NOT IN RELATION TO ANY COOPERATIVE BANK OTHER THAN AGRICULTURAL CREDIT SOC IETY OR PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPM ENT BANK'. 5. THE INTENTION OF THE PROVISION MAY BE DERIVED M ORE PRECISELY FROM RELEVANT PARA 166 OF THE BUDGET SPEECH WHICH S TATED THAT : 'CO- OPERATIVE BANKS, LIKE ANY OTHER BANK, ARE LENDING I NSTITUTIONS AND SHOULD PAY TAX ON THEIR PROFITS, PRIMARY AGRICULTUR AL CREDIT SOCIETIES (PACS) AND PRIMARY COOPERATIVE AGRICULTURAL AND RUR AL DEVELOPMENT BANK (PCARDB) STAND ON A SPECIAL FOOTING AND WILL C ONTINUE TO BE EXEMPT UNDER SECTION 80P OF THE INCOME TAX ACT. HOW EVER, I PROPOSE TO EXCLUDE ALL OTHER CO-OPERATIVE BANKS FRO M THE SCOPE OF THAT SECTION'. ACCORDINGLY, SECTION 80P IS TO BE AM ENDED 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 BANKI NG (INCLUDING PROVIDING CREDIT FACILITIES) CARRIED ON BY A CO-OPE RATIVE SOCIETY WITH ITS MEMBERS SHALL BE INCLUDED IN THE DEFINITION OF 'INC OME' (WITH EFFECT FROM 1ST APRIL, 2007)'. 6. COOPERATIVE BANK UNLIKE OTHER COMMERCIAL BANKS ARE SUBJECTED TO DUAL CONTROL FROM BOTH RBI AS WELL AS FROM STATE COOPERATIVE DEPARTMENT. THE ACCOUNTING TREATMENT FO R A COOPERATIVE BANK IS THEREFORE A RESULT OF GUIDELINES FROM BOTH THE CONTROLLING AUTHORITIES. ORDINARILY A DEDUCTION IS NOT AVAILABL E TO AN ASSESSEE UNLESS SPECIFICALLY PROVIDED UNDER THE ACT. THIS IS IRRESPECTIVE OF ACCOUNTING TREATMENT PROVIDED BY THE ASSESSEE IN IT S BOOKS OF ACCOUNTS. BUT AT THE SAME TIME IT WAS WELL SETTLED THAT DEDUCTION EXPRESSLY MENTIONED UNDER THE ACT ARE NOT EXHAUSTIV E AND PROFIT IS TO BE DERIVED ACCORDING TO ORDINARY COMMERCIAL PRINCIP LES. AS PER THE EXTANT RBI GUIDELINES DATED 01-07-2009 THE INVESTME NT PORTFOLIO OF THE BANKS IS REQUIRED TO BE CLASSIFIED UNDER 3 CATEGORI ES VIZ., HELD THE MATURITY HTM), HELD FOR TRADING (HFT) AND AVAILABLE FOR SALE (AFS). THE VALUE OF EACH KIND OF INVESTMENT IS TO BE DONE IN THE FOLLOWING MANNER: 7 SR.NO. CLASSIFICATION VALUATION NORMS OF INVESTMENT . 1. HTM THESE ARE CARRIED AT ACQUISITION COST UNLES S THE COST IS MORE THAN THE FACE VALUE, IN WHICH CASE THE PREMIUM SHOULD BE AMORTISED OVER THE PERIOD REMAINING TO MATURITY. TH E PREMIUM IS REQUIRED TO BE AMORTISED OVER THE PERIOD REMAINING TO MATURITY. THIS APART, ANY PERMANENT DIMINUTION IN VALUE SHALL FV S HALL GO ON TO REDUCE COST OF THE INVESTMENT. 2. AFS THE INDIVIDUAL SCRIPS IN THE AVAILABLE FOR SALE CATEGORY WILL BE MARKED TO MARKET AT QUARTERLY OR AT MORE FR EQUENT INTERVALS. THESE INVESTMENTS ARE CONSIDERED TO FORM STOCK-IN-T RADE OF A BANK AND THEREFORE ARE TO BE VALUED AT COST OR NRV, WHIC HEVER IS LESS. FALL IN VALUE BELOW COST, THEREFORE, IS TO BE PROVIDED I MMEDIATELY, HOWEVER ANY NET APPRECIATION IN VALUE IS IGNORED AND NOT RE COGNIZED AS INCOME ON THE BASIS OF CONSERVATISM. 3. HFT THE INDIVIDUAL SCRIPS IN THE HELD FOR TRAD ING CATEGORY WILL BE MARKED TO MARKET AT MONTHLY OR AT MORE FREQUENT INT ERVALS AND PROVIDED FOR AS IN THE CASE OF THOSE IN THE AVAILAB LE 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, STA TES AS UNDER: 'AS PER RBI GUIDELINES DATED I6TH OCTOBER, 2000, TH E INVESTMENT PORTFOLIO OF THE BANKS IS REQUIRED TO BE CLASSIFIED UNDER THREE CATEGORIES VIZ. HELD TO MATURITY (HTM), HELD FOR TR ADING (HFT) AND AVAILABLE FOR SALE (AFS). INVESTMENTS CLASSIFIED UN DER HTM CATEGORY NEED NOT BE MARKED TO MARKET AND ARE CARRIED AT ACQ UISITION COST UNLESS THESE ARE MORE THAN THE FACE VALUE, IN WHICH CASE THE PREMIUM SHOULD BE AMORTISED OVER THE PERIOD REMAINI NG TO MATURITY. IN THE CASE OF HFT AND AFS SECURITIES FOR MING STOCK IN TRADE OF THE BANK, THE DEPRECIATION/ APPRECIATION I S TO BE AGGREGATED SCRIP WISE AND ONLY NET DEPRECIATION, IF ANY, IS REQUIRED TO BE PROVIDED FOR IN THE ACCOUNTS. THE LATEST GUID ELINES OF THE RBI MAY BE REFERRED TO FOR ALLOWING ANY SUCH CLAIMS.' 8. THE ITAT, MUMBAI BENCH, IN THE CASE OF ACIT VS. THE BANK OF RAJASTHAN LTD. (2011) TIOL-35-ITAT-MUMBAI, HAS HELD THAT IN CASE O F BANKS, THE PREMIUM PAID IN EXCESS OF FACE VALUE OF INVESTMENTS CLASSIFIED UNDE R HTM CATEGORY WHICH HAS BEEN AMORTISED OVER THE PERIOD TILL MATURITY IS ALL OWABLE AS REVENUE EXPENDITURE SINCE THE CLAIM IS AS PER RBI GUIDELINES AND CBDT A LSO HAS DIRECTED TO ALLOW SUCH PREMIUM. IT HAS ALSO BEEN HELD IN THE CASE OF CATHO LIC SYRIAN BANK LTD. VS. ACIT THAT AMORTIZATION ON PURCHASE OF GOVERNMENT SECURITIES W AS MADE AS PER PRUDENTIAL NORMS OF THE RBI AND SAME WAS ALLOWABLE DEDUCTION. IN VIEW OF ABOVE, ASSESSEE WAS JUSTIFIED IN CONTENDING FOR AMORTIZATION OF PRE MIUM PAID IN EXCESS OF FACE VALUE OF SECURITIES HELD TO MATURITY (HTM) CATEGORY OR PE RIOD REMAINING TILL MATURITY WAS FOUND REASONABLE BY THE CIT(A). ACCORDINGLY ADDITI ON OF RS.17,91,659/- MADE BY THE ASSESSING OFFICER BY DISALLOWING AMOUNT TOWARDS AMORTIZATION OF GOVERNMENT SECURITIES (HMT) WAS DELETED. THIS REASONED FACTUA L 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 8.1 RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH OF THE TRIBUNAL AND IN ABSENCE OF ANY CONTRARY MATERIAL BR OUGHT TO OUR NOTICE AGAINST THE ABOVE CITED DECISION WE FIND NO INFIRMITY IN TH E ORDER OF THE LD.CIT(A) DELETING THE ADDITION. ACCORDINGLY, THE ORDER OF T HE LD.CIT(A) IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6.1 RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH OF THE TRIBUNAL AND IN ABSENCE OF ANY CONTRARY MATERIA L BROUGHT TO OUR NOTICE BY THE LD. DEPARTMENTAL REPRESENTATIVE WE FI ND NO INFIRMITY IN THE ORDER OF THE LD.CIT(A). ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF SEPTEMBER 2013 SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PAN DA) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE DATED: 23 RD SEPTEMBER 2013 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I, THANE 4 CIT-I, THANE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE