ITAT allowed the assessee-bank's claim for deduction of...

ITAT allowed the assessee-bank's claim for deduction of amortization of premium paid on purchase of government securities held under the HTM category. It held that the assessee, engaged in banking business under the Banking Regulation Act, 1949 and Regional Rural Banks Act, 1976, is statutorily required to invest in government securities to maintain SLR and capital adequacy norms prescribed by RBI. The Tribunal treated the premium amortized over the period to maturity as revenue expenditure, following its earlier precedent, and held that such amortization is an allowable deduction in computing taxable income. The Revenue's objections were consequently rejected.

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