Jath Urban Co.operative Bank Ltd., Sangli V. Income-tax Officer,

ITA 43/PUN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0456 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . . , , , BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 43 /PN/201 5 / ASSESSMENT YEAR : 20 0 9 - 1 0 JATH URBAN CO - OPERATIVE BANK LTD., MANGALWAR PETH, MANGALWAR PETH, JATH - 416404 PAN : AA ACJ4578M ....... / APPELLANT / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, SANGLI / RESPONDENT ASSESSEE BY : SHRI C.H. NANIWADEKAR REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 1 7 - 1 1 - 2016 / DATE OF PRONOUNCEMENT : 1 7 - 1 1 - 2016 / ORDER PER VIKAS AWASTHY, JM : TH E APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , KOLHAPUR DATED 16 - 1 0 - 2014 FOR THE ASSESSMENT YEAR 200 9 - 1 0 . 2 ITA NO . 43 /PN/201 5 , A.Y. 200 9 - 1 0 2. SHRI C.H. NANIWADEKAR APPEARING ON BEHALF OF THE ASSESSEE 2. SHRI C.H. NANIWADEKAR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE GROUNDS OF APPEAL NO.2 AND 3 RAISED BY THE ASSESSEE ARE NOT P RESSED. HE FURTHER SUBMITTED THAT THE OTHER ISSUE RAISED IN GROUND NO.1 OF THE APPEAL IS WITH RESPECT TO AMORTIZATION OF PREMIUM PAID ON GOVT. SECURITIES. THIS ISSUE IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN ACIT VS. THE AHMED NAGAR DISTRICT CENTRAL CO - OP. BANK LTD. IN ITA NO.1983/PN/2013, RELATING TO ASSESSMENT YEAR 2010 - BANK LTD. IN ITA NO.1983/PN/2013, RELATING TO ASSESSMENT YEAR 2010 - 11, DECIDED ON 20.02.2015 . 3. SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT HAS PLACED RELIANCE ON THE ORDER OF CIT(A). HOWEVER, THE LD. DR FAIRLY ADMITTE D THAT THE ISSUE RAISED BY THE ASSESSEE IN GROUND NO.1 OF THE APPEAL HAS ALREADY BEEN ADJUDICATED BY THE TRIBUNAL IN SEVERAL CASES. 4. BOTH SIDES HEARD. THE GROUNDS OF APPEAL NO.2 AND 3 ARE DISMISSED AS NOT PRESSED. THE ISSUE ARISING VIDE GROUND OF APPEAL NO.1 IS IN RESPECT OF AMORTIZATION OF PREMIUM PAID ON GOVERNMENT SECURITIES. THE ASSESSEE IS A CO - OPERATIVE SOCIETY ENGAGED IN BANKING BUSINESS WHICH IS REGULATED UNDER BANKING REGULATION ACT, 1949 AND RBI GUIDELINES . DURING THE YEA R UNDER CONSIDERATION, THE ASSESSEE CLAIMED DEDUCTION OF RS.1, 43 , 515 / - AS AMORTIZATION OF PREMIUM PAID ON ACQUISITION OF CERTAIN SECURITIES. THE ASSESSEE HAD PURCHASED SOME SECURITIES AT A PRICE HIGHER THAN THE FACE VALUE OF THE SECURITIES. THE SAID SECU RITIES HAD BEEN CLASSIFIED BY THE ASSESSEE AS HELD TO MATURITY 3 ITA NO . 43 /PN/201 5 , A.Y. 200 9 - 1 0 (HTM SECURITIES). THESE WERE THE SECURITIES, WHICH WERE ACQUIRED BY THE BANK WITH AN INTENTION TO HOLD THEM UPTO THE MATURITY OF THE SECURITIES. BANK WITH AN INTENTION TO HOLD THEM UPTO THE MATURITY OF THE SECURITIES. THE AMOUNT IN EXCESS OF THE FACE VALUE PAID BY THE ASSESSEE IS AMORTIZED OVER THE LIFE OF THE SECURITIES AND PROPORTIONATE CLAIM WAS MADE DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE. IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER . ASSESSING OFFICER . 5. WE FIND THAT THE IDENTICAL ISSUE AROSE BEFORE THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. THE AHMEDNAGAR DISTRICT CENTRAL CO - OP. BANK LTD. (SUPRA). THE TRIBUNAL HELD THAT TH E PREMIUM PAID ON INVESTMENTS CLASSIFIED UNDER HTM CATEGORY WHICH HAS BEEN AMORTIZED OVER THE PERIOD TILL MATURITY IS ALLOWABLE AS REVENUE AMORTIZED OVER THE PERIOD TILL MATURITY IS ALLOWABLE AS REVENUE EXPENDITURE. THE TRIBUNAL HAS BEEN CONSISTENTLY TAKING THIS VIEW IN ALLOWING AMORTIZATION OF PREMIUM ON SIMILAR SET OF FACTS. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HDFC BANK LTD. REPORTED AS 366 ITR 505 (BOM) HAS UPHELD THE VIEW OF TRIBUNAL IN ALLOWING AMORTIZATION OF PREMIUM PAID ON GOVT. SECURITIES TRIBUNAL IN ALLOWING AMORTIZATION OF PREMIUM PAID ON GOVT. SECURITIES HELD TO MATURITY. 6 . FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION ON ACCOUNT OF AMORTIZATION OF PREMIUM 4 ITA NO . 43 /PN/201 5 , A.Y. 200 9 - 1 0 PAID ON GOVERNMENT SECURITIES HELD IN HTM CATEGORY. THE GROUND NO.1 IN APPEAL BY THE ASSESSEE IS THUS, ALLOWED. IN APPEAL BY THE ASSESSEE IS THUS, ALLOWED. 7 . IN T HE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON T HURS DAY, THE 1 7 TH DAY OF NOVEM BER, 2016. SD/ - SD/ - ( . . / R.K. PANDA) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 17 TH NOVEM BER, 2016 GCVSR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) , KOLHAPUR 4. / THE CIT - I / II, KOLHAPUR / CIT (CENTRAL), PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // T RUE COPY// / BY ORDER, / BY ORDER, / SR. PRIVATE SECRETARY , / ITAT, PUNE