ACIT CIR 3, KALYAN V. THE ABHINAV SAHAKARI BANK LTD, MUMBAI

ITA 7485/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83967 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 18-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Keywords: Capital asset; Business income; Depreciation; Cost of acquisition; Revenue expenditure; Capital expenditure

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 7485/MUM/2012 (ASSESSMENT YEAR: 2009-10) ACIT CIR. 3, 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN (WEST) KALYAN -421 301 VS THE ABHINAV SAHAKARI BANK LTD, P-48, NIWASI VIBHAG, NEAR USMA PETROL PUMP, MIDC, DOMBIVLI(E), MUMBAI -421 203 .: PAN: AAAJT 1277 A (APPELLANT-CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SHRI PITAMBAR DAS RESPONDENT BY : NONE !'#$% /DATE OF HEARING : 04-08-2014 &'( #$%/ DATE OF PRONOUNCEMENT 29 -10-2014 * + * + * + * + O R D E R , , , , -'' -'' -'' -'' '. '. '. '. , . . . . . .. . PER VIVEK VARMA, J.M. : THE APPEAL IS FILED BY THE DEPARTMENT AGAINST THE O RDER OF CIT(A) -1, MUMBAI, DATED 25.09.2012. 2. AT THE TIME, WHEN THE CASE WAS CALLED UP FOR HEA RING, THERE WAS NO ATTENDANCE ON BEHALF OF THE ASSESSEE. SINCE, THE CASE HAD BEEN ADJOURNED A NUMBER OF TIMES, WE DECIDED THE CASE TO BE HEARD EX PARTE , IN ABSENCE OF THE ASSESSEE OR ITS AR. 3. THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE DEP ARTMENT: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 44,92,244/- BEING AMORTIZATION OF PREMIUM PAID ON P URCHASE OF SECURITIES CLASSIFIED UNDER THE HTM CATEGORY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT AMORTIZATION O F PREMIUM PAID ON PURCHASE OF SECURITIES CLASSIFIED UNDER THE HTM CATEGORY IS AN ASCERTAINED AND DETERMINED LOSS FOR THE BANK THE ABHINAV SAHAKARI BANK LTD ITA 7485/MUM/2012 2 AND THE SAME IS REQUIRED TO BE ALLOWED WHILE COMPUT ING THE BUSINESS INCOME OF THE ASSESS BANK. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) FAILED TO CONSIDER THE FACT THAT THE ASSESSEE HAS HELD THE SECURITIES AS INVESTMENTS. THEREFORE, WHEN SUCH SECURITIES ARE SOLD AND ENCASHED AT THE TIME OF MAT URITY, THE PROFIT/LOSS ARISING THEREON IS TO BE CONSIDERED UND ER THE HEAD CAPITAL GAINS, AND THE AMORTIZATION CLAIMED BY THE ASSESSEE ON INVESTMENTS HELD IN THE PERMANENT CATEGORY CANNOT B E ALLOWED TO BE DEDUCTED WHILE COMPUTING THE TOTAL INCOME. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ALTER O R DELETE ANY GROUND OF APPEAL. 4. THE FACTS ARE THAT THE ASSESSEE IS A COOPERATIVE BANK AND IS ENGAGED IN THE BUSINESS OF BANKING. THE AO NOTICED THAT THE ASSESSEE HAD CLAIMED AN EXPENDITURE OF RS. 44,92,244/- UNDER THE HEAD AMORTIZATION OF INVESTMENTS. THE AO SOUGHT AN EXPLA NATION FROM THE ASSESSEE WITH REGARD TO THE CLAIM MADE AND THE ASSE SSEE EXPLAINED THAT THE ASSESSEE BANK HAD PURCHASED GOVERNMENT SEC URITIES UNDER HELD TO MATURITY (HTM), WHICH ARE IN THE NATURE OF SIT. THE ASSESSEE ALSO EXPLAINED TO THE AO THAT INTEREST INCOME FROM INVESTMENTS HAS BEEN ACCOUNTED FOR AS BUSINESS INCOME AND OFFERED F OR TAX. SINCE THE PROFIT & LOSS ON SALE OF THESE SECURITIES IS ACCOUN TED FOR AS BUSINESS INCOME/LOSS, THE SAME IS ALSO ACCOUNTED FOR ACCORDI NGLY AND, THEREFORE IS AN ALLOWABLE ALLOWANCE. THE ASSESSEE ALSO SUBMIT TED THAT THIS PRINCIPLE IS FOLLOWED AFTER THE CIRCULAR ISSUED BY THE RESERVE BANK OF INDIA (RBI) AND FOLLOWING THIS, CBDT ISSUED INSTRUC TION NO. 17 DATED 26/11/2000, PARA (VII). ACCORDING TO THIS INSTRUCTI ON, INVESTMENTS CLASSIFIED AS HTM CATEGORY NEED NOT BE M TO M UNLES S THE COST WENT BEYOND THE FACE VALUE, IN WHICH CASE, THE EXCESS SH ALL BE AMORTIZED OVER THE PERIOD REMAINING TO MATURITY. 5. THE ASSESSEE, ACCORDINGLY AMORTIZED A SUM OF RS. 44,92,244/-. THIS CLAIM AND THE EXPLANATION GIVEN BY THE ASSESSE E, WAS NOT ACCEPTED BY THE AO WHO OBSERVED THAT THE CIRCULAR P ERTAINED TO SECURITIES AVAILABLE FOR SALE AND THEREFORE, SECURI TIES HELD FOR TRADING THE ABHINAV SAHAKARI BANK LTD ITA 7485/MUM/2012 3 WERE IN THE NATURE OF SIT, AND THE SECURITIES HELD FOR MATURITY (HTM) WERE IN THE NATURE OF CAPITAL ASSET, THUS NOT LIABL E TO BE CHARGED TO THE PROFIT & LOSS ACCOUNT. 6. AGGRIEVED BY THIS OBSERVATION OF THE AO, THE ASS ESSEE APPROACHED THE CIT(A), BEFORE WHOM, THE ASSESSEE RE ITERATED ITS SUBMISSIONS MADE BEFORE THE AO. 7. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS AN D THE CIRCULAR OF THE RBI & THE INSTRUCTION NO. 17, ISSUED BY CBDT, O BSERVED, I HAVE GONE THROUGH THE ASSESSMENT ORDER PASSED BY THE A.O., WRITTEN SUBMISSIONS FILED BY THE APPELLAN T AND ALSO HAD DETAILED DISCUSSION WITH THE A.R. OF THE APPELLANT DURING THE APPELLATE PROCEEDINGS. THE CRU X OF THE ARGUMENTS OF THE APPELLANT IS THAT THE INVESTME NTS IN GOVT. SECURITIES MADE BY THE APPELLANT BANK ARE THE STATUTORY INVESTMENTS AS PER THE GUIDELINES OF THE RBI. THE BANK HAS TO PURCHASE THE GOVT. SECURITIES IN ORDER TO MAINTAIN THE STATUTORY LIQUIDITY RATIO (SL R) AS PER THE GUIDELINES OF THE RESERVE BANK OF INDIA (RBI). THE SLR' IS MAINTAINED BY THE BANK BY PARKING THE FUNDS IN GOVERNMENT SECURITIES' ISSUED BY CENTRAL AS WELL AS DIFFERENT STATE GOVERNMENTS. THE INVESTMENTS MADE I N THE GOVERNMENT SECURITIES ARE HAVING VERY HIGH LIQU IDITY, AS THE SAME ARE REGULARLY & ACTIVELY TRADED ON A DEDICATED TRADING PLATFORM FACILITATED BY RBI. TO M AINTAIN THIS STATUTORY SLR, THE BANKS HAVE TO PURCHASE GOVERNMENT SECURITIES FROM THE OPEN MARKET. AS THE SAID GOVERNMENT SECURITIES (G-SEC) ARE ACTIVELY TRADED, THE MARKET PRICE (VALUE) OF THE SAME VARIES ON A DAY TO DAY BASIS, DEPENDING UPON THE STATUTORY REGULATIONS IMPOSED BY THE RBI, REQUIREMENT OF THE VARIOUS BANK S & THE PREVAILING INTEREST REGIME IN THE NATIONAL AS WELL AS INTERNATIONAL MARKET. THE PREMIUM PAID ON THESE SEC URITIES IS AN EXPENDITURE AND ALLOWABLE DEDUCTION. 4.2. THE ABOVE ARGUMENTS HAVE BEEN CONSIDERED AND I INTEND TO AGREE WITH THESE ARGUMENTS. THE APPELLANT HAS TO MAINTAIN THE STATUTORY LIQUIDITY RATIO (SLR) AS PER THE RBI GUIDELINES AND ACCORDINGLY TO MAINTAIN THE SLR, THE BANK HAS TO INVEST IN GOVT. SECURITIES, WHICH ARE T RADED IN THE OPEN MARKET. THE SAID INVESTMENTS ARE LONG T ERM AND THEREFORE HAD BEEN CLASSIFIED AS HELD TO MATURI TY IN ACCORDANCE WITH THE RBI GUIDELINES. THE PREMIUM PAI D ON THE INVESTMENTS IN THESE SECURITIES IS NOTHING B UT AN EXPENDITURE, WHICH HAS TO BE NECESSARILY INCURRED I N ORDER TO FOLLOW THE GUIDELINES OF THE RBI WHICH IS THEIR CONTROLLING BODY. THUS, IT EMERGES FROM THE ABOVE F ACTS THE ABHINAV SAHAKARI BANK LTD ITA 7485/MUM/2012 4 THAT THE AMORTIZATION OF PREMIUM PAID ON PURCHASE O F SECURITIES CLASSIFIED UNDER THE 'HTM' CATEGORY IS A N ASCERTAINED & DETERMINED INCOME I LOSS TO THE BANK & SINCE THE SAME IS NOT EXPRESSLY DISALLOWED BY ANY PROVISIONS OF INCOME- TAX ACT, 1961, THE SAME HAS T O BE ALLOWED WHILE COMPUTING THE BUSINESS INCOME OF THE APPELLANT BANK. 4.3. THE AR HAS FURTHER ARGUED THAT ONCE INTEREST INCOME ON THESE SECURITIES IS REGULARLY SHOWN AS IN COME BY THE BANK AND THEREFORE THE CORRESPONDING DEDUCTI ON OF PREMIUM EXPENDITURE IS ALLOWABLE. I AGREE WITH THE ABOVE ARGUMENT OF THE APPELLANT. THE INTEREST RECEI VED BY THE APPELLANT BANK ON THE GOVT. SECURITIES IS ACCOUNTED ON ACCRUAL BASIS AND BOOKED TO THE CREDIT OF PROFIT AND LOSS ACCOUNT ON YEAR TO YEAR BASIS AND ACCORDINGLY APPLYING THE CONCEPT OF MATCHING PRINCI PLE, WHICH IS AS PER THE ACCOUNTING STANDARDS AND THE RB I GUIDELINES, THE EXPENDITURE OF AMORTIZED PREMIUM IS TO BE ALLOWED AS REVENUE EXPENDITURE AND CONSEQUENTLY, HAS TO BE DEBITED TO PROFIT & LOSS ACCOUNT AND THEREFOR E, I FIND NO INFIRMITY IN THIS ACTION OF THE APPELLANT. 4.4. FURTHER, THE SECURITIES PURCHASED BY THE APPEL LANT CO-OP. BANK & CLASSIFIED UNDER THE CATEGORY 'HELD T O MATURITY' DO FORM PART OF 'STOCK-IN-TRADE' OF THE APPELLANT CO-OP. BANK, BECAUSE THE SAME ARE PURCHASED WITH A PREDOMINANT MOTIVE OF MAINTAINING SLR OF THE BANK, NON MAINTENANCE OF WHICH CAN HAVE SERI OUS RAMIFICATIONS ON THE VERY EXISTENCE OF BUSINESS OF BANKING. 4.5. THE JUDICIAL DECISION CITED BY THE AO IS IN RE SPECT OF A 'POWER FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. AND NOT IN RESPECT OF A 'BANK'. TH E BUSINESS OF BANKING IS VERY MUCH DIFFERENT THAN THE BUSINESS OF A 'POWER FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. A BANK HAS TO REPAY TH E MONIES AND DEPOSITS ACCEPTED BY IT ON DEMAND TO ITS ACCOUNT HOLDERS AND DEPOSIT HOLDERS AND FOR THAT RE ASON IT HAS TO MAINTAIN CRR & SLR AS PER STIPULATIONS OF RBI. SUCH OBLIGATION OF REPAYMENT ON DEMAND TO ITS DEPOS ITORS IS NOT THERE FOR NBFC'S, PFC'S OR IDC'S. THEREFORE, THE DECISION OF HONOURABLE MADRAS HIGH COURT IN CASE OF T N POWER FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. CANNOT BE APPLIED TO THE CASE OF A PPELLANT BANK. 4.6. THUS, IN VIEW OF THE ABOVE FACTS & THE JUDICIA L DECISIONS ON THE SUBJECT MATTER, I AM OF THE VIEW T HAT THE AMORTIZATION OF PREMIUM PAID ON PURCHASE OF SECURITIES CLASSIFIED UNDER THE 'HTM' CATEGORY IS A N ASCERTAINED & DETERMINED BUSINESS LIABILITY AND THEREFORE AN ALLOWABLE -EXPENDITURE AND THE DISALLO WANCE OF THE SAME IS UNWARRANTED. 4.7. IN VIEW OF THE FACTS AND CIRCUMSTANCES MENTION ED ABOVE, IN MY OPINION, THE ACTION OF THE AO TREATING THE AMORTIZATION PREMIUM OF INVESTMENTS IN GOVT. SECURI TIES ( THE ABHINAV SAHAKARI BANK LTD ITA 7485/MUM/2012 5 AMOUNTING TO RS. 44,92,244!- AS NOT ALLOWABLE EXPENDITURE AND ADDING THE SAME TO THE INCOME OF TH E ASSESSEE FOR THE YEAR UNDER CONSIDERATION, IS NOT I N ORDER AND THEREFORE CANNOT BE SUSTAINED. THE ADDITI ON MADE IS THEREFORE DIRECTED TO BE DELETED. 8. THE CIT(A), THUS ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND DELETED THE ADDITION MADE BY THE AO. 9. AGAINST THIS ORDER OF THE CIT(A), THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT. 10. BEFORE US, THE DR SUPPORTED THE CASE OF THE AO AND VEHEMENTLY ARGUED THAT THE ORDER OF THE CIT(A) IS ERRONEOUS. 11. AS OBSERVED IN PRE PARA, WE ARE DISPOSING OFF T HE APPEAL EX-PARTE , IN ABSENCE OF THE ASSESSEE OR ITS AR, WE AFTER HEAR ING THE DR, PURSUED THE ORDERS OF THE AO AS WELL AS THE CIT(A). 12. ON GOING THROUGH THE ORDER OF THE CIT(A), RELEV ANT PORTION OF WHICH HAS BEEN EXTRACTED HERE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ISSUE, AS IMPUGNED IN THE APPEAL. THE REASONS C ITED BY THE CIT(A) TO ACCEPT THE CLAIM OF THE ASSESSEE ARE IN ACCORDAN CE WITH THE INSTRUCTIONS ISSUED BY THE CBDT AND RBI. WE FURTHER FIND THAT A VIEW IN FAVOUR OF THE ASSESSEE HAD BEEN TAKEN BY THE COO RDINATE BENCH AT MUMBAI IN THE CASE OF BANK OF RAJASTHAN LTD. VS ACI T, ITA NO. 2246/MUM/2009 (AND OTHER ITAS) , WHEREIN IT WAS HELD, WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NO T IN DISPUTE THAT IN THE CASE OF THE ASSESSEE ALL INVESTMENT IS STOCK IN TRADE WHICH IS ACCEPTING BY THE DEPARTMENT SINCE LONG. FO R THE FIRST TIME THIS POINT WAS RAISED IN THE ASSESSMENT YEAR 1 982-83 TO 1984-85. IN THESE YEARS THE APPELLATE TRIBUNAL JODH PUR BENCH, JODHPUR VIDE M.A. NOS. 2,3 &4 (JDPR)/2000 OR DER DATED 14/12/2002 HAS HELD THAT IN THE CASE OF THE BANK(ASSESSEE) THE INVESTMENT IS STOCK IN TRADE AND ENTIRE LOSS ON ACCOUNT OF DIMINISHING IN VALUE HAS BEEN ALLOWED AS DEDUCTION. THIS JUDGMENT HAS BEEN ACCEPTED BY THE D EPARTMENT AND NO APPEAL WAS FILED BEFORE THE HON'BLE RAJASTHAN HIGH COURT. 16. SINCE BEGINNING THE LOSS OF INVESTMENT BEING LO SS ON ACCOUNT THE ABHINAV SAHAKARI BANK LTD ITA 7485/MUM/2012 6 OF DIMINISHING IN VALUE OF INVESTMENT(STOCK IN TRAD E) INCLUDING AMORTIZATION IS ALLOWED AS BUSINESS LOSS AND THE DEPARTMENT HAS ALLOWED THE SAME AND ACCEPTED TH IS POSITION SINCE LONG IN ALL THESE ASSESSMENT PROCEED INGS. 17. IN THE CASE OF THE BANK ALL INVESTMENTS ARE STO CK IN TRADE AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF UCO BA NK REPORTED AT 240 ITR 355. THERE IS NO INVESTMENT IN THE NATURE OF INVESTMENT ON WHICH THE EXPENDITURE/LOSS CAN BE TREATED IN THE NATURE OF CAPITAL EXPENDITURE. THE SECURITIES ARE CATEGORIZED AS PER THE NORMS OF THE RBI. AS PER THE 'SIGNIFICANT ACCOUNTING P OLICIES' GIVEN IN SCHEDULE 17 ATTACHED WITH THE BALANCE SHEE T EVERY YEAR, THE FACT THAT ALL INVESTMENTS ARE STOCK IN TR ADE HAS BEEN CLARIFIED IN THE CASE OF THE ASSESSEE. IT DOES NOT M EAN THE SECURITIES KEPT IN CATEGORY OF HTM CANNOT BE SOLD B EFORE THE MATURITY. THE HTM HAS BEEN SOLD IN SUBSEQUENT YEAR AND INCOME/LOSS TREATED AS BUSINESS INCOME/LOSS AND NOT AS CAPITAL GAIN/LOSS AT ALL. 18. ALL INCOME/LOSS WHATEVER ARISING ON ACCOUNT OF INVESTMENT(STOCK IN TRADE) INTEREST LOSS/PROFITS OR DIMINISHING OF INVESTMENT INCLUDING SECURITIES HELD UNDER HTM CATE GORY HAS BEEN TREATED AS BUSINESS INCOME/LOSS AND ALWAYS HAS BEEN TREATED BY DEPARTMENT AS BUSINESS AND ASSESSED ACCO RDINGLY IN ALL PAST YEAR ASSESSMENT BY DEPARTMENT. THE INTE REST EARNED IN THE CASE OF THE BANK, ON ALL SHARE AND SECURITY ASSETS ARE STOCK IN TRADE AND WHATEVER THE LOSS/PROFIT ARE NOT IN THE NATURE OF CAPITAL. THE ENTIRE INTEREST INCOME OF SE CURITIES UNDER WHATEVER CATEGORY HAD BEEN AND IS BEING ASSES SED IN ALL THESE YEARS AS BUSINESS INCOME. THEREFORE, AS S UCH DIFFERENT CATEGORIES OF THE INCOME DOES NOT FORM(HT M) AS CAPITAL IN NATURE. 19. AS STATED EARLIER, THE FIGURE OF RS. 65.62 LACS R EPRESENTS THE AMORTIZATION OF PREMIUM FOR SECURITIES HELD UNDER H TM CATEGORY, WHICH HAS BEEN WRITTEN OFF IN TERMS OF THE RBI CIRCU LAR DATED 16/10/2000. PARA 14 OF THE SAID CIRCULAR READS AS U NDER: '14. INVESTMENTS CLASSIFIED UNDER HELD TO MATURITY CATEGORY NEED NOT TO BE MARKED TO MARKET AND WILL BE CARRIED AT ACQUISITION COST UNLESS IT IS MORE THAN THE FACE VA LUE, IN WHICH CASE THE PREMIUM SHOULD BE AMORTIZED OVER THE PERIO D REMAINING TO MATURITY.' VIDE RBI CIRCULAR NO. DBOD N O.BP.B.0 32/21.04.08/2000-01 DATED 16/10/2000, BANK MAY SHIF T INVESTMENT TO/FROM HTM CATEGORY WITH APPROVAL OF BO ARD FROM/TO OTHER CATEGORY. FURTHER IN TERMS OF ABOVE R EFERRED CIRCULAR, PROFIT ON SALE OF INVESTMENTS IN HTM CATE GORY SHOULD BE TAKEN TO THE PROFIT AND LOSS ACCOUNT. THERE IT IS V ERY CLEAR THAT SECURITIES HELD UNDER HTM CATEGORY CAN BE SOLD BY B ANK AT ANY POINT OF TIME. THEREFORE, THESE SECURITIES ARE BEIN G AS STOCK IN TRADE AND PROFIT/LOSS ON SALE OF THESE SECURITIES A RE TREATED AS BUSINESS INCOME/LOSS. 20. THE ASSESSEE HAS FURTHER FILED A COPY OF CBDT INSTRUCTION NO-17 DATED 26/11/2008 PUBLISHED IN 220 CTR (STATUTE PAGES 41 TO 44). THE CBDT IN PARA (VII) OF THIS INSTRUCTION HAS STATED THAT IN THE CASES OF BANKS W HERE RBI HAD ISSUED GUIDELINES FOR ALLOWING DEDUCTION OF AMORTIZ ATION THE ABHINAV SAHAKARI BANK LTD ITA 7485/MUM/2012 7 PREMIUM PAID ON SECURITIES UNDER HTM CATEGORY. THE RELEVANT PORTION OF INSTRUCTION IS AS UNDER: 'AS PE R RBI GUIDELINES DATED 16TH OCTOBER, 2000, THE INVESTMENT PORTFOLIO OF THE BANKS IS REQUIRED TO BE CLASSIFIED UNDER THR EE CATEGORIES VIZ. HELD TO MATURITY (HTM), HELD FOR TRADING (HFT) AND AVAILABLE FOR SALE (AFS). INVESTMENTS CLASSIFIED UN DER HTM CATEGORY NEED NOT BE MARKED TO MARKED AND ARE CARRI ED AT ACQUISITION COST UNLESS THESE ARE MORE THAN THE FAC E VALUE, IN WHICH CASE THE PREMIUM SHOULD BE AMORTIZED OVER THE PERIOD REMAINING TO MATURITY. IN THE CASE OF HFT AND AFS S ECURITIES FORMING STOCK IN TRADE OF THE BANK, THE DEPRECIATION/APPRECIATION IS TO BE AGGREGATED SCRIP WISE AND ONLY NET DEPRECIATION, IF ANY, IS REQUIRED TO BE PR OVIDED FOR THE ACCOUNTS. THE LATEST GUIDELINES OF THE RBI MAY BE R EFERRED TO FOR ALLOWING ANY SUCH CLAIMS.' 21. SINCE THE CLAIM OF THE ASSESSEE IS AS PER RBI GU IDELINES AND CBDT HAS ALSO ISSUED DIRECTIONS TO ALLOW PREMIUM TO BE AMORTIZED REMAINING WITH THE MATURITY, THEREFORE, T HE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF THE ASSES SEE AMOUNTING TO RS. 65,51,826/-. 22. SINCE THE CLAIM OF THE ASSESSEE IS ACCEPTED ON MERITS THE GROUND WITH REGARD TO CHALLENGING OF THE VALIDITY O F CIT(A)'S ORDER HOLDING INITIATION OF REASSESSMENT PROCEEDING S TO BE INVALID IS NOT TAKEN UP FOR CONSIDERATION. 23. IN THE RESULT, THIS APPEAL BY THE REVENUE IS DI SMISSED . 13. SINCE THE ISSUE IS SQUARELY COVERED BY THE DECI SION IN BANK OF RAJASTHAN ( SUPRA ), WE HAVE TO NO HESITATION TO SUSTAIN THE ORDER OF THE CIT(A), AND CONSEQUENTLY REJECTING THE GROUNDS AS R AISED BY THE DEPARTMENT. 14. SINCE ALL THE GROUNDS AS RAISED ARE INTERCONNEC TED, OTHER GROUNDS ARE ALSO REJECTED. 15. IN THE RESULT, THE APPEAL, AS FILED BY THE DEPA RTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2014. SD/- SD/- (B R BASKARAN) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 29 TH OCTOBER, 2014 THE ABHINAV SAHAKARI BANK LTD ITA 7485/MUM/2012 8 $/ COPY TO:- 1) / THE APPLICANT. 2) / THE RESPONDENT. 3) THE CIT (A)-I, THANE. 4) / I , THANE / THE CIT-I, THANE. 5) -'01$! A , THE D.R. A BENCH, MUMBAI. 6) 12.3 COPY TO GUARD FILE. *+! / BY ORDER [ 4/56 , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *895! '.!. * CHAVAN, SR. PS