The Sabarkanth Dist. Cent.Co.Op.Bank Ltd., Sabarkantha V. The ACIT, S.K. Circle, Himatnagar

ITA 3005/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73032 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-02-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 16-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Assessee Lawyers: A C SHAH
• Keywords: Depreciation; Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 3005/AHD/2013 (ASSESSMENT Y EAR: 2010-2011) THE S.K. DIST. CENTRAL CO.OP BANK LTD. HIMATNAGAR- 383001, DIST: SABARKANTHA V/S THE ACIT, S.K. CIRCLE, HIMATNAGAR (APPELLANT) (RESPONDENT) PAN: AAAAT 1019 P APPELLANT BY : SHRI A.C. SHAH RESPONDENT BY : SHRI J.P. JHANGID, SR. D.R. ( )/ ORDER DATE OF HEARING : 25.02.20 14 DATE OF PRONOUNCEMENT : 07 -03-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-VIII, AHMEDABAD DATED 28.11.2013 FOR A.Y. 2010-2011. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON REC ORD ARE AS UNDER. 3. ASSESSEE IS A CO-OPERATIVE SOCIETY ENGAGED IN TH E BANKING BUSINESS AND INSURANCE AGENCY BUSINESS. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2010-2011 ON 18.09.2010 SHOWING TOTAL INCO ME OF RS. 2,25,37,550/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER T HE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 22.03. 2013 AND THE TOTAL INCOME WAS DETERMINED AT RS. 4,86,37,430/-. AGGRIE VED BY THE ORDER OF A.O., ITA NO 3005/AHD/2013 . A.Y. 2010- 2011 2 ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) V IDE ORDER DATED 28.11.2013 DISMISSED THE APPEAL OF THE ASSESSEE. AG GRIEVED BY THE AFORESAID ORDER OF CIT(A), THE ASSESSEE IS NOW IN A PPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1 . THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISA LLOWANCE OF RS. 2,60,99,875 BEING THE AMORTIZATION OF PREMIUM PAID ON GOVERNMENT SECURITI ES ON THE GROUND THAT THE ASSESSEE IS NOT TRADING IN SUCH SECURITIES IN AS MUCH AS THE AMORTIZATION I S TO BE PROVIDED AS PER RBI GUIDELINES AND THAT IT IS ALLOWABLE AS DEDUCTION AS PER INSTRUCTION NO. 17 DA TED 26-11-2008. 1.1 THE APPELLANT SAYS AND SUBMITS THAT THE AMORTIZ ATION HAS BEEN PROVIDED SINCE YEARS BY THE BANK AND THAT IT IS CONSISTENTLY ALLOWED AS DEDUCTION. 2. THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE GOVERNMENT SECURITIES ON WHICH IS THE AMORTIZATION IS CLAIMED IS NOT HELD TO MATURITY SINCE THERE ARE TRANSACTIONS OF SALE DURING THE YEAR IN AS MUCH AS THERE IS NO BAR OF SELLING THE GOVERNMENT SECURITIE S EVEN IF IT IS HELD TO MATURITY. 3. THE LEARNED CIT(A) HAS ERRED IN INTERPRETING THE GUIDELINE ISSUED BY THE RBI AND NOT FOLLOWING INSTRUCTION NO. 17 DATED 26-11-2008. 4. THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS, THE ONLY EFFECTIVE GROUND IS WITH RESPECT TO DISALLOWANCE OF AMORTIZATION OF PRE MIUM PAID ON GOVERNMENT SECURITIES. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NOTICED THAT ASSESSEE HAS DEBITED RS. 2,60,99,875/- TOWARDS PREMIUM ON IN VESTMENT WRITTEN OFF PAID FOR CERTAIN GOVERNMENT SECURITIES. HE ALSO NOTED TH AT THOUGH ASSESSEE HAD NOT SOLD INVESTMENT, BUT PREMIUM ON INVESTMENTS WAS WRITTEN OFF AND CLAIMED AS EXPENSES. A.O. WAS OF THE VIEW THAT THOUGH THE ASSESSEE HAD FOLLOWED THE RBI DIRECTIONS, THE RBI DIRECTIONS WERE IN THE CONTEXT OF PRESENTATION OF NPA/INVESTMENT IN THE BALANCE SHEET OF THE BANKS AN D HAD NOTHING TO DO WITH THE COMPUTATION OF TAXABLE INCOME. HE WAS FURTHER OF THE VIEW THAT SINCE THERE WAS NO SALE OF INVESTMENT, THE LOSS DEBITED I N THE PROFIT AND LOSS ACCOUNT AND CLAIMED AS EXPENSES WAS NOT AN ACTUAL E XPENDITURE AND THEREFORE NOT ALLOWABLE. HE ACCORDINGLY DISALLOWED THE CLAIM OF EXPENSES AND ADDED THE PROVISION OF RS. 2,60,99,875/- WHICH WAS DEBITED BY THE ASSESSEE TO ITS PROFIT AND LOSS ACCOUNT. AGGRIEVED BY THE OR DER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) UPHELD THE ORDER OF A.O. BY HOLDING AS UNDER:- ITA NO 3005/AHD/2013 . A.Y. 2010- 2011 3 2.3. A PERUSAL OF RBI GUIDELINES SHOWS THA T THE BANK HAS TO CLASSIFY THE SECURITY OR THE INVESTMENT AT THE TIME OF PURCHASE AND FOLLOW T HE PROCEDURE PRESCRIBED BY THE RESERVE BANK OF INDIA. THE CLAIM OF THE APPELLANT IS THAT IT HAS CLASSIFIE D CERTAIN SECURITIES WHICH WERE GOVERNMENT OF INDIA BONDS AS 'HELD TO MATURITY' AND IN ACCORDANCE WITH THE RBI GUIDELINES AMORTISED THE PREMIUM PAID ON PURCHASE OF THE SECURITY. CONSIDERING THE GUIDELINE S ISSUED BY THE CBDT IN CIRCULAR NO. 17(SUPRA) AND THE PREPONDERANCE OF THE JUDICIAL OPINION ON TH E ISSUE THE APPELLANT WOULD BE ENTITLED TO CLAIM TH E AMORTIZATION COST AS A DEDUCTION IN CASE FOR THE SE CURITIES HELD BY IT ARE HTM IN ACCORDANCE WITH TH E GUIDELINES ISSUED BY THE RBI. IN ORDER TO ASCERTAIN WHETHER THE APPELLANT BANK HAS CORRECTLY CLASSIFIED THE SECURITIES AS H TM OR THE CLAIM THAT THE SECURITIES HAVE BEEN 'HELD TO MATURITY', THE APPELLANT WAS ASKED VIDE ORDER SHEE T NOTING DATED 23/10/2013 TO PROVE THAT SECURITIES WE RE CLASSIFIED AS 'HELD TO MATURITY'. ON THE APPOINTED DATE CERTAIN DETAILS WERE FURNISHED INDIC ATING THE DETAILS OF SECURITIES HELD IN THE ACCOUNT AS ON 31/03/2010. IT ALSO FURNISHED AN ENGLISH TRANSLA TION OF THE BALANCE SHEET IN WHICH THE INVESTMENT I N CENTRAL AND STATE GOVERNMENT SECURITY WAS INDICATED . HOWEVER NO DETAIL OR EVIDENCE TO SHOW THAT THE SECURITIES INDICATED IN THE BALANCE SHEET WERE HTM WAS FURNISHED, THEREFORE, THE APPELLANT WAS ONCE AGAIN ASKED TO FURNISH EVIDENCE TO PROVE THAT THE S ECURITIES SHOWN WERE HTM. IT WAS ALSO ASKED TO GIVE DETAILS OF SECURITIES IN THE ACCOUNT/PORTFOLIO WHIC H HAS BEEN CATEGORISED BY IT AS HTM. ON THE APPOINTED DATE A CHART INDICATING THE SECURITIES HE LD FROM 31/03/2007 TO 31/03/2010 WAS FURNISHED. A PERUSAL OF THE CHART REFLECTED THAT COMPLETE DETAIL S ABOUT THE SECURITIES HELD HAVE NOT BEEN GIVEN. ACCORDINGLY THE APPELLANT WAS ASKED TO FURNISH DETA ILS OF HTM FROM 01/04/2006 AND ALSO THE TRANSACTIONS THERE IN. THE APPELLANT'S AR ON THE LAST DATE OF HEARING SUBMITTED THAT SINCE THE D ETAILS WERE OLD-HE WAS UNABLE TO FILE THE SAME. IN ORDER TO FIND OUT THE CORRECT POSITION THE DETAI LS OF INVESTMENT IN EARLIER YEARS WERE OBTAINED FRO M THE AO. THE DETAILS RECEIVED SHOW THAT THERE IS A V ARIATION IN THE INVESTMENT IN STATE AND GOVERNMENT SECURITIES IN EVERY YEAR. THE QUANTA OF INVESTMENT IN VARIOUS YEARS ARE AS UNDER: - SR. NO. DATE INVESTMENT (RS.) 1 31/03/2007 120,00,00,000/- 2 31/03/2008 109,00,00,000/- 3 31/03/2009 74,00,00,000/- 4 31/03/2010 58,00,00,000/- AN EXAMINATION OF THE DETAILS SHOW THAT THE APPELLA NT BANK HAD ALSO BEEN SELLING CERTAIN SECURITIES FROM THIS ACCOUNT DURING THE EARLIER YEARS AS WELL AS DURING THE PRESENT YEAR. THE APPELLANT BANK PUBLISHES ITS ANNUAL ACCOUNT IN LOCAL LANGUAGE THAT IS GUJARATI. HOWEVER, IT HAS ALSO FURNISHED AN ENGLISH TRANSLATION OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE YEAR. A PERUSAL OF THE BALANCE SHEET SHOWS THAT THE INVESTMENTS HAVE BEEN SHOWN IN ITEM NO 4 OF THE BALANCE SHEET ON THE ITA NO 3005/AHD/2013 . A.Y. 2010- 2011 4 ASSET SIDE. THE APPELLANT HAD TOTAL INVESTMENT OF R S. 952256875.00 AS ON 31/03/2009 AND IT INCREASED TO RS.1753727000.00 AS ON 31/03/2010. FURTHER AS PE R ITEM NUMBER 4(I) THE INVESTMENT IN CENTRAL AND STATE GOVERNMENT SECURITIES HAVE BEEN SHOWN WHICH A RE STATED TO BE AT BOOK VALUE. THE INVESTMENT IN CENTRAL AND STATE GOVERNMENT SECURITIES WAS FOR RS. 74 CRORE AT THE BEGINNING OF THE YEAR AND IT WAS REDUCED TO RS. 58 CRORES AT THE END OF THE YEAR. TH E APPELLANT EXPLAINED THAT IT HAD SOLD SECURITIES O F RS. 20 CRORE DURING THE YEAR AND HAS ALSO PURCHASED THE SECURITY OF RS. 4 CRORE DURING THE YEAR. FURTHER PERUSAL OF THE SECURITY HELD BY THE APPELLA NT SHOW THAT THESE ARE GOVERNMENT OF INDIA SECURITIES WHICH ARE MATURING IN SUBSEQUE NT YEARS. FOR THE SAKE OF UNDERSTANDING, THE APPELLANT HAD A SECURITY WHICH IS NAMED AS '10.03 G OI 2019', THE YEAR 2019 SHOW THE YEAR OF MATURITY. SIMILARLY THERE ARE OTHER SECURITIES WHICH WERE DUE FOR MATURITY IN THE YEAR 2022, 2023, 2026, 2017 AND SO ON. IT IS IMPORTANT TO NOTE THE APPELLANT HA S SOLD FOUR SECURITIES WHICH WERE '6.35 % GOI 2020' DURING THE YEAR. IT IS APPARENT FROM THE ABOVE TABL E THAT THE APPELLANT HAD BEEN SELLING THE SECURITIE S IN THE EARLIER YEARS AS THE INVESTMENT IN ANY OF THE T WO YEARS WAS NOT CONSTANT. THE ABOVE CIRCUMSTANCES CLEARLY SHOW THAT THE APPEL LANT'S CLAIM THAT THE SECURITIES WERE 'HELD TO MATURITY 1 IS NOT BORNE OUT BY FACTS. FIRST OF ALL IN THE BAL ANCE SHEET THERE IS NO SUCH INDICATION THAT THE SECURITIES WERE HTM. THE ! BALANCE SHEET ONLY INDICATES THAT IT WAS AN INVESTM ENT IN CENTRAL AND STATE GOVERNMENT SECURITIES. THE RBI GUIDELINES REPRODUCED ABOVE CLEARLY MANDATES THAT THE INVESTMENTS SHOULD BE CLEARLY CLASSIFIED. HAD IT BEEN PROPERLY CLASSIFIED THE SAME WOULD HAVE BEEN SHOWN BY THE BANK IN THE BALANCE SHEET ALSO. SECOND LY, THE RBI GUIDELINES(PARA 16.5.1) ALSO RESTRICT THE CONVERSION OF ONE TYPE OF SECURITY TO THE OTHER ESP. THE HTM. IT ALSO PRESCRIBES THAT THE CONVERSI ON FROM HTM TYPE OF SECURITY TO OTHER CAN BE DONE ONLY ONCE IN A YEAR, NORMALLY AT THE BEGINNING OF THE YEAR, WHEREAS THE APPELLANT HAS SOLD THE SECURITIES AT THREE DIFFERENT TIMES DURING THE YEAR. FIRST SA LE WAS MADE BY THE APPELLANT ON 30/11/2009, SECOND ON 25/03/2010 AND TWO OTHER SALES WERE MADE ON 30/03/2010. THIS IS IN CLEAR VIOLATION TO THE GUIDE LINES LAID DOWN BY THE RBI. ON ONE SIDE THE APPELLA NT IS CLAIMING THAT THE AMORTISATION EXPENSES ARE BEIN G CLAIMED AS PER THE GUIDELINES ISSUED BY THE RBI WHICH ARE ACCEPTABLE BY THE DEPARTMENT, ON THE OTHE R HAND THE RBI GUIDELINES ARE NOT BEING FOLLOWED. THE APPELLANT HAS EXPRESSED ITS INABILITY TO FURNISH THE COMPLETE DETAILS FOR LAST FOUR-FIVE Y EARS WHICH WOULD HAVE ENABLED ME TO EXAMINE WHETHER THE APPELLANT HAD REALLY MAINTAINED THE SECURITIES AS HTM OR IT WAS A SIMPLE INVESTMENT IN SECURITY WH ICH WAS NOT TO BE KEPT TILL MATURITY AND CAN BE SOL D WHENEVER IT IS NEEDED. IT MAY BE EITHER AFS OR HFT. SINCE THE APPELLANT HAS NOT COOPERATED, APPARENTLY, TO AVOID GETTING EXPOSED IT CAN BE CONC LUDED THAT THE SECURITIES HELD BY IT WERE NOT HTM. THE INTENTIONS AS WELL AS THE BEHAVIOUR OF THE APPE LLANT BY NOT HOLDING THE SECURITIES TILL MATURITY A ND SELLING THE SAME BEFORE MATURITY CLEARLY SHOW THAT THE SECURITIES WERE NOT HTM. IT HAS NEITHER CLASSIFIED IT AS HTM NOR KEPT IT TILL MATURITY. THE APPELLANT HAS ALSO CLAIMED THAT IT HAS BEEN FOL LOWING THE SIMILAR ACCOUNTING PRACTICE IN EARLIER YEARS AND CLAIMED THE AMORTISATION EXPENSES THERE ALSO AND HAS REQUESTED THAT ON THE PRINCIPLE OF CONSISTENCY THE DEDUCTION SHOULD BE ALLOWED. IT IS A KNOWN FACT THAT THE INCOME OF THE COOPERATIVE ITA NO 3005/AHD/2013 . A.Y. 2010- 2011 5 BANKS WAS NOT TAXABLE TILL A, Y 2005 - 06. SINCE TH E INCOME WAS EXEMPT NO SERIOUS SCRUTINY WAS DONE TILL THAT YEAR. SUBSEQUENTLY IT APPEARS THAT THE FA CTS HAVE NOT BEEN CLEARLY EXAMINED BY THE AO IN SUBSEQUENT YEARS. IT IS A SETTLED LEGAL PRINCIPLE THAT PRINCIPLE OF RES JUDICATA IS NOT APPLICABLE T O INCOME TAX PROCEEDINGS UNLESS THE FACTS ARE IDENTIC AL. IT IS CLEAR FROM THE PRECEDING DISCUSSION THAT THE FACTS IN EARLIER YEARS HAVE NOT BEEN EXAMINED AND H AVE NOT BEEN CLEARLY BROUGHT OUT. THE APPELLANT IS NOT FURNISHING THE CURRENT FACTS EVEN NOW. IT HAS A LSO BEEN HELD BY HONOURABLE SUPREME COURT IN THE FAMOUS LANDMARK JUDGMENT IN THE CASE OF DISTRIBUTOR S (BARODA)(155 ITR 120) THAT MISTAKE ONCE COMMITTED SHOULD NOT BE PERPETUATED FOREVER. THE APPELLANT HAS ALSO RELIED ON CERTAIN JUDICIAL P RONOUNCEMENTS, WHICH HAVE BEEN REPRODUCED IN THE RELEVANT PAGES WHERE THE SUBMISSIONS OF THE APPELLA NT ARE MENTIONED. I HAVE CAREFULLY PERUSED ALL THE JUDGMENTS HOWEVER THE SAME ARE NOT APPLICABLE TO TH E PRESENT FACTS. THE FACTS IN THE PRESENT CASE ARE DIFFERENT. IN NONE OF THE CASE THE FACTUAL DISCUSSI ONS ABOUT THE SECURITIES HELD HAVE BEEN MADE. IN TH E PRESENT CASE IT HAS BEEN DEMONSTRATED CLEARLY THAT THE CLAIM OF THE APPELLANT THAT THE SECURITIES WERE HELD BY IT AS HTM IS FACTUALLY INCORRECT. THEREFORE , THE JUDGMENTS ARE RESPECTFULLY DISTINGUISHED. IN VIEW OF THE ABOVE DISCUSSION IT IS HELD THAT THE AMORTISATION EXPENSES CLAIMED BY THE APPELLANT ON ACCOUNT OF THE PREMIUM PAID FOR PURCHASE OF GOVERNM ENT SECURITY, WHICH IS CLAIMED TO HAVE BEEN HELD BY IT AS HTM, ARE NOT ALLOWABLE AS DEDUCTION. IT HA S BEEN CLEARLY DEMONSTRATED IN THE PRECEDING DISCUSSION THAT THE SECURITIES ARE NOT HELD TO MAT URITY AS CLAIMED BY THE APPELLANT. 6. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE I S NOW IN APPEAL BEFORE US. 7. BEFORE US, THE LD. A.R. REITERATED THE SUBMISSIO NS MADE BEFORE CIT(A). HE FURTHER SUBMITTED RBI REQUIRES THE ASSESSEE TO MAIN TAIN STATUTORY LIQUIDITY RATIO (SLR) AND FOR THAT IT IS REQUIRED TO INVEST I N GOVERNMENT SECURITIES. THE SECURITIES ARE AT TIMES PURCHASED AT PREMIUM TO THE FACE VALUE. RBI GUIDELINES REQUIRE THAT THE PREMIUM PAID ON THE PUR CHASE OF SECURITIES NEEDS TO BE AMORTISED OVER THE LIFE OF SECURITY. HE FURT HER SUBMITTED THAT THE PREMIUM WHICH HAS BEEN WRITTEN OFF IS ALLOWABLE AS DEDUCTION AS PER THE MASTER CIRCULAR OF RBI. HE ALSO PLACED ON RECORD T HE COPY OF THE AFORESAID CIRCULAR. HE FURTHER SUBMITTED THAT ASSESSEE HAS BE EN CONSISTENTLY FOLLOWING THE POLICY OF WRITING OF THE PREMIUM IN EARLIER YEA RS AND THE SAME WAS ALSO ACCEPTED BY THE DEPARTMENT. HE FURTHER SUBMITTED THAT ASSESSEE IN THE PAST HAD PURCHASED CERTAIN SECURITIES WHICH WERE GOVERNM ENT OF INDIA BONDS AND WAS CLASSIFIED AS HELD TO MATURITY (HTM) IN ACCOR DANCE WITH RBI GUIDELINES ITA NO 3005/AHD/2013 . A.Y. 2010- 2011 6 AND THE PREMIUM PAID ON THE PURCHASE OF SECURITIES WAS ALSO AMORTISED AS PER RBI GUIDELINES. HE FURTHER SUBMITTED THAT THOUG H THE ASSESSEE HAD SOLD THE SECURITIES BEFORE THE MATURITY DATE, BUT THE SA ME WAS NOT PROHIBITED BY THE GUIDELINES OF RBI. HE ALSO PLACED RELIANCE ON THE D ECISION OF UNITED COMMERCIAL BANK VS. CIT (1999) 240 ITR 355 (SC) AND THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. RAJKOT DI STRICT CO-OPERATIVE BANK TAX APPEAL NO. 56/A/2013 ORDER DATED 10.02.2014. HE THEREFORE SUBMITTED THAT BY FOLLOWING THE GUIDELINES PRESCRIBED UNDER R BI, THE ASSESSEE HAS CORRECTLY CLAIMED THE EXPENDITURE AND THE SAME SHOU LD THEREFORE BE ALLOWED. 8. THE LD. D.R. ON THE OTHER HAND POINTED TO THE FI NDINGS OF CIT(A) AND POINTED TO THE FACT THAT CIT(A) HAS GIVEN A FINDING THAT THE A SSESSEES CLAIM THAT THE SECURITIES WERE HELD TO MATURITY IS NOT BORNE OUT OF BY FACTS. HE FURTHER SUBMITTED THAT CIT(A) HAS NOTED THAT THE RBI GUIDEL INES PRESCRIBES THAT THE CONVERSION OF SECURITY FROM HTM TO OTHERS CATEGORIE S CAN BE DONE ONLY ONES IN A YEAR AND AFTER FOLLOWING THE GUIDELINES PRESCR IBED BY RBI BUT BEFORE CIT(A), ASSESSEE HAD EXPRESSED ITS INABILITY TO FU RNISH COMPLETE DETAILS SO AS TO ENABLE HIM TO EXAMINE AS TO WHETHER THE ASSESSEE HAS REALLY MAINTAINED THE SECURITIES IN HTM CATEGORY. HE THEREFORE SUBMIT TED THAT IN THE ABSENCE OF NECESSARY DETAILS, THE CIT(A) WAS FULLY JUSTIFIED I N UPHOLDING THE ORDER OF A.O. HE THUS SUPPORTED THE ORDER OF A.O. AND CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE US, THE ISSUE IS ABOUT THE ALLOWABILITY OF A MORTIZATION OF PREMIUM OF SECURITIES WHICH ARE SOLD BEFORE THE MATURITY DATE BUT HELD UNDER HELD TO MATURITY (HTM) CATEGORY. BEFORE US THE LD. A.R. HA S SUBMITTED THAT THE SECURITIES THAT WERE PURCHASED WERE HELD BY IT UNDE R HELD TO MATURITY CATEGORY AND THOUGH THE SAME WERE SOLD BEFORE ITS M ATURITY BUT IT HAD FOLLOWED THE ACCOUNTING TREATMENT PRESCRIBED BY RBI AND THEREFORE THE SAME IS ALLOWABLE. ON THE OTHER HAND, WE FIND THAT CIT(A ) HAS NOTED THAT CERTAIN REQUIREMENTS AS STATED IN THE RBI CIRCULAR IS REQUI RED TO BE FOLLOWED BY AN ITA NO 3005/AHD/2013 . A.Y. 2010- 2011 7 ASSESSEE FOR CONVERSION OF SECURITY FROM HTM TO OTH ER CATEGORY. HE HAS ALSO NOTED THAT TO ASCERTAIN AS TO WHETHER THE ASSESSEE HAS CORRECTLY CLASSIFIED THE SECURITIES AS HTM AND FOLLOWED THE GUIDELINES PRESC RIBED BY RBI, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS, WHICH TH E ASSESSEE FAILED TO FURNISH. CIT(A) HAS NOTED THAT THE ASSESSEE HAS FAI LED TO FOLLOW THE RBI GUIDELINES. IN VIEW OF THE CONTRARY SUBMISSIONS OF BOTH THE PARTIES, WE ARE OF THE VIEW THAT IN ALL FAIRNESS AND IN THE INTEREST O F JUSTICE, THE ISSUE NEEDS TO BE RE-EXAMINED MORE SO WITH RESPECT TO FOLLOWING BY TH E ASSESSEE OF THE APPLICABLE GUIDELINES PRESCRIBED BY RBI WITH RESPEC T TO THE VALUATION, ACCOUNTING TREATMENT AND OTHER PROCEDURAL REQUIREME NTS. WE THEREFORE REMIT THE ISSUE TO THE FILE OF CIT(A) FOR HIM TO EXAMINE THE ISSUE AFRESH IN THE LIGHT OF THE APPLICABLE RBI GUIDELINES, THE DECISIONS RELIED BY ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH AS PER LAW BY WAY OF A SPEA KING ORDER. NEEDLESS TO STATE THAT CIT(A) SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERAT E BY PROMPTLY SUBMITTING THE NECESSARY DETAILS CALLED FOR BY CIT(A) IN THIS REGARD. THUS THIS GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 07 - 03 - 2014. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD