Assistant Commissioner of Income-tax, V. Raigad District Central Co.op. bank Ltd., Raigad

ITA 699/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0951 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Capital asset; Cost of acquisition; Revenue expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , AM . / ITA NO. 699 /PN/201 4 / ASSESSMENT YEAR : 20 08 - 09 THE ADDL. COMMISSIONER OF INCOME TAX, PANVEL RANGE , PANVEL . / APPELLANT VS. RAIGAD DISTRICT CENTRAL CO - OP. BANK LTD., ALIBAG, DIST. RAIGAD . / RESPONDENT PAN: AA A BT2313D / APPELLANT BY : S HRI DHEERAJ KUMAR JAIN / RESPONDENT BY : SHRI SUBODH RATNAPARKHI / DATE OF HEARING : 29 . 1 0.2015 / DATE OF PRONOUNCEMENT: 29 .1 0 .2015 / / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - I , THANE , DATED 2 7 . 1 2 .20 1 3 RELATING TO ASSESSMENT YEAR 20 08 - 09 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT T HE ACT) . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) - I, THANE HAS ERRED IN APPRECIATING THE FACT THAT THE SECURITIES UNDER THE CATEGORIES OF HTM ARE IN THE N ATURE OF CAPITAL ASSET AND HENCE PREMIUM PAID THEREON IS ALSO A CAPITAL EXPENDITURE AND THEREFORE IS NOT ALLOWABLE REVENUE EXPENDITURE. 2) THE APPELLANT PRAYS THE ORDER OF THE LD CIT(A) - I, THANE, MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORE D. 3 ) THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUND /GROUNDS , WHICH MAY BE NECESSARY. ITA NO. 699 /PN/20 1 4 RAIGAD DIST. CENTRAL CO - OP. BANK LTD. 2 3. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS IN RELATION TO AMORTIZA TION IN RESPECT OF GOVERNMENT SECURITIES HELD IN HTM CATEGORY , WAS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN ACIT VS. ALIBAG CO - OPERATIVE URBAN BANK LTD. I N ITA NO.698/PN/2014 RELATING TO ASSESSMENT YEAR 20 1 0 - 11 , ORDER DATED 31.08.2015. 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE BANK WAS A CO - OPERATIVE BANK . DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD CLAIMED DEDUCTION OF RS. 3,10,450/ - AS AMORTIZATION OF PREMIUM PAID ON ACQUISITION OF HELD TO MATURITY (HTM) SECURITIES AND THE SAME HAS BEEN DISALLOWED BY THE ASSESSING OFFICER. 5. THE CIT(A) IN TURN, FOLLOWING THE ORDER OF PUNE BENCH OF TRIBUNAL IN ACIT VS. ALIBAGH CO - OPERATIVE URBAN BANK LTD., IN ITA NO. 2173/PN/2012 RELATING TO ASSESSMENT YEAR 2009 - 10 , DECIDED THE ISSUE IN FAVO UR OF THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RESPECT OF AMORTIZATION OF PREMIUM PAID ON GOVERNMENT SECURITIES. THE ASSESSEE WAS A CO - OPERATIVE BANK. DURING THE YEAR UND ER CONSIDERATION, THE ASSESSEE CLAIMED A DEDUCTION OF RS.3,10,450/ - AS AMORTIZATION OF PREMIUM PAID ON ACQUISITION OF CERTAIN SECURITIES. THE ASSESSEE HAD PURCHASED SOME SECURITIES AT AN ACQUISITION COST WHICH WAS HIGHER THAN THE FACE VALUE OF THE SECURIT IES. THE SAID SECURITIES HAD BEEN CLASSIFIED BY THE ASSESSEE AS HELD TO MATURITY (HTM SECURITIES). THESE WERE THE SECURITIES, WHICH WERE ACQUIRED BY THE BANK WITH AN INTENTION TO HOLD THEM UPTO THE MATURITY OF THE SECURITIES. THE AMOUNT IN EXCESS OF T HE FACE VALUE PAID BY THE ASSESSEE WAS 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 CIT(A) HAD ALLOWED THE CLAIM OF ASSESSEE BY FOLLOWING THE ORDERS OF TRIBUNAL. ITA NO. 699 /PN/20 1 4 RAIGAD DIST. CENTRAL CO - OP. BANK LTD. 3 7. WE FIND THAT THE SIMILAR ISSUE AROSE BEFORE THE TRIBUNAL IN ACIT VS. ALIBAGH CO - OPERATIVE URBAN BANK LTD., IN ITA NO.2173/PN/2012 RELATING TO ASSESSMENT YEAR 2009 - 10 , ORDER DATED 23.09.2013 AND IN ITA NO.698/PN/2014 , RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 31.08.2015. T HE TRIBUNAL HAD ALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE, IN TURN FOLLOWING THE RATIO LAID DOWN BY THE TRIBUNAL IN EARLIER YEARS. FOLLOWING THE SAME PARITY OF REASONING, W E HOLD THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION ON ACCOUNT OF AMORTIZATION OF PREMIUM PAID ON GOVERNMENT SECURITIES HELD IN HTM CATEGORY. UPHOLDING THE ORDER OF CIT(A), WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 8 . IN THE RESU LT, THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF OCTOBER , 2015. SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 30 TH OCTOBER , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPEL LANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - II , THANE ; 4. / THE CIT - I I, THANE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE