Dena Gujarat Gramin Bank, Gandhinagar vs Department Of Income Tax
- CitationITA. No. 2059/Ahd/2011
Ratio decidendi
The rule this decision rests on
Amortisation of premium paid on investments classified as held to maturity, spread equally over the remaining period to maturity in accordance with the RBI's guidelines, is an allowable deduction in computing the assessee's income under the Income Tax Act, and is not to be disallowed as capital in nature merely because the premium is paid on investments. The Tribunal is bound to, and does, follow the principle that premium amortisation on debentures held as investments is allowable, as laid down in the Supreme Court decision in Madras Industrial Investment Corporation, which it accepts as applicable to the present facts and to the assessee's SLR investments.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Dena Gujarat Gramin Bank, JillaPanchayatBhavan, Sector-17, Gandhinagar Respondent
PAN: AAAJD0596Q
अपीलाथ क ओर से /By Appellant :Shri Dinesh Singh, Sr. D.R. यथ क ओर से/By Respondent: ShriMukesh M. Patel, A.R. सन ु वाईक तार ख/Date of Hearing : 13.05.2015 घोषणाक तार ख/Date of Pronouncement :05.06.2015
ORDER
PER SHAILENDRA KUMAR YADAV, J.M:
This appeal has been filed by Revenueagainst the order ofCIT(A), Gandhinagar, dated 27.05.2011 for the assessment year 2008-09 on following ground:
"1. The learned CIT(Appeals) has erred in law and on facts in deleting the disallowance of Rs.1,30,19,855/- made I TA N o . 2 0 5 9 / A h d / 1 1 A . Y . 0 8 - 0 9 ( A C I T v s . D e n a G u ja r a t G r a m i n B a n k ) Page 2
on account of expenses being premium paid on SLR (Statutory Liquidity Ratio) investments."
2. Assessing Officer disallowed assessee's claim of Rs.1,30,19,855/- for deduction in respect of amortization of premium of investments, treating the same as capital in nature.
3. Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same CIT(A) has allowed the same, which has been opposed before us on behalf of Revenue. Learned Departmental Representative has supported the order of Assessing Officer. On other hand, learned Authorized Representative supported the order of CIT(A).
4. After going through rival submissions and material on record, we are of the view that amortization of premium is allowable in accounting practice. As per RBI's guidelines, amortization of premium in case of assets treated as HTM (Held to Maturity) (Investments) is to be amortized divided equally over the period which is remaining for their maturity. Same has been done by assesse. Amortization of expenses has been recognized in similar circumstances in case of premium of debentures, which was also held as investments in different judgments including that of Hon'ble Supreme Court in case of Madras Industrial Investment Corp. Ltd. Vs. CIT(A) 225 ITR 802 (SC) relied by assesse. In view of this, CIT(A) allowed the I TA N o . 2 0 5 9 / A h d / 1 1 A . Y . 0 8 - 0 9 ( A C I T v s . D e n a G u ja r a t G r a m i n B a n k ) Page 3
claim of assesse. The order of CIT(A) is also supported by the decision of ITAT, Pune 'B' Bench in ITA No. 712/PN/2013 for A.Y.2009-10 in case of The Ahmednagar Merchants Co-op Bank Ltd. Vs. ACIT. In view of above decision, we are not inclined to interfere in the finding of CIT(A) who has deleted the disallowance of Rs.1,30,19,855/- made on account of expenses being premium paid on SLR (Statutory Liquidity Ratio) investments. Same is upheld.
5. In result, Revenue's appeal is dismissed.
Pronounced in the open Court on this the 5thday of June, 2015.
Sd/- Sd/- (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 05/06/2015
S.K.SINHA आदे श क त ल प अ े षत / Copy of Order Forwarded to:- 1. राज व / Revenue 2. आवेदक / Assessee
3. संबं'धत आयकर आयु)त / Concerned CIT
4.आयकर आयु)त- अपील / CIT (A)
5. -वभागीय 0त0न'ध,आयकर अपील य अ'धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड6 फाइल / Guard file.
By order/आदे श से,
उप/सहायक पंजीकार आयकर अपील य अ'धकरण,अहमदाबाद ।
Strengthen preparation & delivery of orders in the ITAT
1) Date of taking dictation 13.05.2015
2) Direct dictation by Member straight on XXX computer/laptop/dragon dictate I TA N o . 2 0 5 9 / A h d / 1 1 A . Y . 0 8 - 0 9 ( A C I T v s . D e n a G u ja r a t G r a m i n B a n k ) Page 4
3) Date of typing & draft order place before Member 14.05.2015
4) Date of correction
5) Date of further correction
6) Date of initial sign by Members
7) Order uploaded on
8) Original dictation pad has been enclosed in this file
9) Final order and 2nd copy send to Bench Clerk on
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