TaxTMI 
TaxTMI 
2015 (4) TMI 662
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....on of premium expenditure for HTM securities by payment of premium over and above the face value of such securities. The CIT(A) was not correct in confirming disallowance of such amortization expenditure as various Judicial precedents of High Court and Tribunals have held it to be an allowable expenditure. It be held accordingly. 2. On the facts and circumstances of the case and in law the Ld. CIT(A) was not correct in his decision to disallow such amortization expenditure holding that there was no provision in the I. T. Act, 1961 to allow amortization premium as deduction either in the year of acquisition of HTM securities or over the period of maturity on deferred basis. This also runs contrary to Cl. (vii) of Instruction No. 17/2008 dt.....
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....e Hon'ble Bombay High Court on similar issue, held as under: "As far as question (C) is concerned, we find that an identical question of law was framed and answered in favour of the assessee by this court in its judgment dated July 4, 2014, in Income Tax Appeal No.1079 of 2012, CIT v. Lord Krishna Bank Ltd. (now merged with HDFC Bank Ltd.) (2014) 366 ITR 416 (Bom). Mr. Suresh Kumar fairly stated that question (C) reproduced above is covered by the said order. In view thereof, we are of the view that even question (C) does not arise any substantial question of law that requires an answer from us." And a similar view has been taken by ITAT, Pune 'A' Bench in the ....
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....o any cooperative bank other than agricultural credit society or primary cooperative agricultural and rural development bank". 5. The intention of the provision may be derived more precisely from relevant Para 166 of the budget speech which stated that : "Co-operative banks, like any other bank, are lending institutions and should pay tax on their profits, Primary Agricultural Credit Societies (PACS) and Primary Cooperative Agricultural and Rural Development Bank (PCARDB) stand on a special footing and will continue to be exempt under section 80P of the Income Tax Act. However, I propose to exclude all other co-operative banks from the scope of that....
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....d be amortised over the period remaining to maturity. The premium is required to be amortised over the period remaining to maturity. This apart, any permanent diminution in value shall FV shall go on to reduce cost of the investment. 2. AFS The individual scrips in the Available for Sale category will be marked to market at quarterly or at more frequent intervals. These investments are considered to form stock-in-trade of a bank and therefore are to be valued at cost or NRV, whichever is less. Fall in value below cost, therefore, is to be provided immediately, however any net appreciation in value is ignored and not recognized as income on the basis of conservatism. 3. HFT The individual scrips in the Held for Trading category will be m....
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....so has directed to allow such premium. It has also been held in the case of Catholic Syrian Bank Ltd. Vs. ACIT that amortization on purchase of Government securities was made as per prudential norms of the RBI and same was allowable deduction. In view of above, assessee was justified in contending for amortization of premium paid in excess of face value of securities held to maturity (HTM) category or period remaining till maturity was found reasonable by the CIT(A). Accordingly addition of Rs. 17,91,659/- made by the Assessing Officer by disallowing amount towards amortization of Government Securities (HMT) was deleted. This reasoned factual and legal finding of the CIT(A) needs no interference from our side. We uphold the same. 9. As a r....