Sadhana Sahakari Bank Ltd., Pune V. Income-tax Officer,

ITA 59/PUN/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8544 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 08-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MIHEER G LIMAYE
• Keywords: Capital asset
• Section: 143(3); 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.59/PN/2014 (ASSESSMENT YEAR : 2008-09) SADHANA SAHAKARI BANK LTD., SHIVAM COMPLEX, PUNE SOLAPUR ROAD, HADAPSAR, PUNE 411 028. PAN : AABAS2204G . APPELLANT VS. INCOME TAX OFFICER, WARD 6(2), PUNE. . RESPONDENT ASSESSEE BY : MR. MIHEER G. LIMAYE & MR. KISHOR B. PHADKE DEPARTMENT BY : MR. RAJESH DAMOR DATE OF HEARING : 17-12-2014 DATE OF PRONOUNCEMENT : 29-12-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, PUNE DATED 11.10.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 16.11.2010 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL :- 1. THE LD. AO ERRED IN LAW AND ON FACTS AND FURTHE R LEARNED CIT(A)-III ERRED IN CONFIRMING AO'S ACTION FOR DISA LLOWING AMORTIZED PREMIUM EXPENDITURE OF RS.5,97,004/- ON INVESTMENTS ACQUIRE D UNDER THE SLR NORMS OF RBI AND CATEGORIZED AS 'HELD TO MATURITY. 2. THE LD. AO ERRED IN LAW AND ON FACTS AND FURTHER LEARNED CIT(A)-III ERRED IN CONFIRMING AO'S ACTION OF TREAT ING INVESTMENTS CATEGORIZED UNDER THE GROUP 'HELD TO MATURITY' AS CAPITAL ASSET U/S 2(14) OF THE ITA, 1961. 3. THE LD. AO ERRED IN LAW AND ON FACTS AND FURTHER LEARNED CIT(A)-III ERRED IN CONFIRMING AO'S ACTION THAT INVESTMENTS GROUPED UNDER ITA NO.59/PN/2014 'HELD TO MATURITY' ARE NOT 'CAPITAL ASSETS' FOR THE ASSESSEE AND ARE SIMPLY INVESTMENTS MADE IN COMPLIANCE OF SLR REQUIR EMENTS OF RBI. 4. THE LD. AO ERRED IN LAW AND ON FACTS AND FURTHER LEARNED CIT(A)-III ERRED IN CONFIRMING AO'S ACTION IN DISTURBING THE ACCOUNTING POLICY OF AMORTIZATION OF PREMIUM ON INVESTMENTS UNDER THE CATEGORY 'HELD TO MATURITY' FOLLOWED BY THE ASSESSEE CONSISTE NTLY AND CONTINUOUSLY (AS PRESCRIBED BY RBI) FOR PAST MANY YEARS; WITHOUT ANY RATIONAL REASONING. 3. ALTHOUGH, ASSESSEE HAS RAISED MULTIPLE GROUNDS O F APPEAL BUT THE SOLITARY DISPUTE IS WITH REGARD TO DEDUCTION ON ACC OUNT OF AMORTIZATION OF PREMIUM PAID FOR ACQUISITION OF SECURITIES CATEGORI ZED AS HELD TO MATURITY (HTM). 4. THE ASSESSEE IS A CO-OPERATIVE SOCIETY REGISTERE D UNDER THE MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960 AND IS CARRYING ON THE BUSINESS OF BANKING IN TERMS OF A LICENSE ISSUED BY THE RESE RVE BANK OF INDIA (RBI). ASSESSEE CLAIMED DEDUCTION FOR AMORTIZATION OF PREM IUM PAID ON ACQUISITION OF SECURITIES CATEGORIZED AS HTM, WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAME WAS CAPITAL IN NATURE. THE CIT(A) HAS ALSO AFFIRMED THE ORDER OF THE ASSESSING OFFICER, AGAINS T WHICH ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING, IT WAS A COMMON POINT BE TWEEN THE PARTIES THAT THE AFORESAID ISSUE HAS BEEN CONSISTENTLY DECIDED B Y THE PUNE OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND IN THIS REGARD, LD. R EPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE FOLLOWING DECISIONS OF THE PUNE BENCH OF THE TRIBUNAL :- (A) SUVARNAYUG SAHAKARI BANK LTD. VS. ACIT ITA NO .1668/PN/2012; (B) ACIT VS. OZER MERCHANT CO-OP. BANK ITA NO.158 8/PN/2012; (C) ACIT VS. HUTATMA SAHAKARI BANK LTD. ITA NO.38 9/PN/2013; (D) PRATHAMIK SHIKSHAN SAHAKARI BANK LTD. VS. ACIT ITA NO.1671/PN/2012; (E) BHAGINI NIVEDITA SAHAKARI BANK LTD. VS. DCIT ITA NO.690/PN/2013; ITA NO.59/PN/2014 (F) THE SANGLI BANK LTD. VS. ACIT ITA NO.846/PN/2 006; AND, (G) COSMOS CO-OP. BANK LTD. VS. DCIT ITA NO.460 & 461 /PN/2012. 6. APART THEREFROM, IT IS ALSO UNDISPUTED THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT-2, MUMBAI VS. HDFC BANK LT D., (2014) 49 TAXMANN.COM 335 (BOM) HAS HELD THAT AN ASSESSEE IS AMORTIZATION OF PREMIUM PAID ON INVESTMENTS HELD TO MATURITY (HTM) ON THE GROUND OF THE MANDATE BY RBI GUIDELINES. FOLLOWING THE AFORESAID JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT, WE HEREBY SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM FOR DEDUCTION FOR AMORTIZATION OF PREMIUM PAID ON INVESTMENTS HELD TO MATURITY (I. E. HTM) AMOUNTING TO RS.5,97,004/-. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DECEMBER, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 29 TH DECEMBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE