2015 (6) TMI 553

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....33/- by the Assessing Officer That amortization of premium paid on govt. securities be allowed as claimed and the addition made may be deleted." 2. The briefly stated the facts which reveal from the record are as under. The assessee society is in the business of banking and also derives income from insurance business. The assessee has made investments in certain government securities as per the norms prescribed by the RBI. The said securities were classified under two different heads i.e. Held to Maturity (HTM) and Available For Sale (AFS). The assessee has made a claim of Rs. 15,11,333/- under the head 'Premium paid on government securities'. The assessee explained that the said claim represents excess acquisition of cost over the funds....

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....d therefore, the same is not allowable expenditure. The A.O made the addition to the extent of Rs. 14,70,000/-. The Ld CIT(A) confirmed the addition. 14. We have heard the parties. The Ld Counsel placed his heavy reliance on the decision of the Hon'ble High Court of Bombay in the case of CIT Vs. Bank of Baroda and in the case of UCO Bank Vs. CIT, 240 ITR 355 (SC). In the case of Bank of Baroda (Supra), the issue before their Lordship was whether the assessee was entitled for deduction on account of depreciation in the value of investments. The method of valuation followed by the assessee Bank was to value investments at cost or market value whichever was lower. The assessee had claimed the depreciation to the tune of Rs. 11,82,35,0....