2012 (11) TMI 336

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....on of premium paid on investment made in GOI Bonds/Government securities as per RBI circular. The relevant effective grounds of appeal read as under: "2. That on the facts and in the circumstances of the case learned CIT(A) as also AO erred in disallowing Rs.22,44,300/- being the amortization of premium paid on investment made in GOI Bonds/Government Securities as per RBI circular as the same are allowable as deduction as per   2.1 RBI circular bearing No.CO.BSD.1.PCB 44/12.05.2005/2000-01   2.2 CBDT instructions No.17/2008 dt.26.11.2008 vide para-2(vii)   2.3 Decision in the case of ACIT vs. The Bank of Rajasthan Ltd (2011-TIOL-35-ITAT-Mum)   2.4 UCO Bank vs CIT (1999) 240 ITR 355(SC)   2.5 State B....

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....nd on given to understand that it is not correct, the assessee has withdrawn the revised return. But the AO has not considered the withdrawal. Thus, the claim of amortization of Rs.22,44,300/- stood disallowed. 4. Aggrieved, the assessee moved the matter in appeal before the first appellate authority. The CIT(A) was of the view that the income is to be computed as per the provisions of the Income-tax Act and not under the provisions of the RBI or any direction issued thereunder. In view of this legal position, he did not find any infirmity in the AO's observation. Hence, he confirmed the disallowance of Rs.22,44,300/-. 5. The assessee is still aggrieved and is on second appeal before us with this issue with the grounds of appeal extracte....

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....was made as per the prudential norms of the RBI. Following the Tribunal decision in the assessee's own case and considering that the assessee bank is following consistent and regular method of accounting system, there is no justification in interfering with the order of the Commissioner of Income-tax (Appeals) on this issue of amortization of premium on government securities. United Commercial Bank v. CIT (1999) 156 CTR (SC) 380 ; (1999) 240 ITR 355 (SC) and South Indian Bank Ltd., (ITA No.126/Coch/2004, dated.___ Sept, 2005 followed." (ii) The Khanapur Co-op Bank Ltd v. ITO - ITA No.141/PNJ/2011, dated.8.9.2011 : The Hon'ble Bench of Panaji Tribunal had recorded its findings that- "6. Likewise, the premium amortized at Rs.1,78,098/- is ....