TaxTMI 
TaxTMI 
2013 (5) TMI 875
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....ding the disallowance of the claim of diminution in the value of securities of Rs. 9.45 crores, in respect of securities classified as 'Held till maturity' category, made by the assessing officer. 2. Whether, on facts and in the circumstances of the case and in law, the assessing officer is justified in estimating Rs. 2.70 lacs as expenditure pertaining to tax free income u/s. 14A and disallowing the same. The appellant submits that, since the facts are similar, the same be allowed as allowed by Tribunal A Bench, Pune in ITAT No. 1844/PN/05 A.Y. 2002/03 order dtd. 26the Sept. 2008, in appellant's appeal. 3. The assessing officer has erred in disallowing part of expenses as under, as "personal nature" on estimate b....
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....ld under HTM category and the amount of provision, which is reduced from the profits on sale of securities in the computation of income was correctly added by the Assessing Officer. Now the assessee is in appeal before us. We have heard the parties and perused the record. 4. We find that the assessee has classified the securities in the three categories (a) Held till Maturity (HTM), (b) Available for sale (AFS) and (c) Held for trading (HFT). The Assessing Officer was of the opinion that the loss on diminution of the value of the securities cannot be charged to the profit and loss account in the case of securities held under the category of HTM. We find that the assessee bank has followed the RBI guidelines and as per the RBI guidelines ....
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....t raising any question. If at this juncture we go with the stand of the revenue then that will distort the entire picture. Admittedly whatever the expenditure is amortized the same is added back when the securities are sold. Another aspect we are to consider is that the method and practice adopted by the assessee was never changed by the Assessing Officer in past. 7. So far as the securities held under the HTM category the I.T.A.T., Pune has taken a view in the case of Latur Urban Co-operative Bank Ltd. Vs. ACIT ITA Nos. 778 and 792/PN/2011 order dated 31-08-2012 that all the securities held by the assessee are part of the stock-in-trade irrespective of their classification. So far as the treatment of the assessee in classifying the secu....
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.... the entire investment in securities had been made out of surplus non-interest bearing funds, the A.O estimated the proportionate expenditure attributable to investment in tax free securities at Rs. 32,67,090/- which is 94% of the total expenses. However, the disallowance has been made by the A.O at 10% of Rs. 32,67,090/- i .e. Rs. 3,26,700/-. It was claimed that there is no provision in the Act that proportionate expenses should be disallowed. However, the A.O did -not agree with the contention of the assessee. 13. On an appeal , the CIT(A) confirmed the action of the A.O. 14. Aggrieved, the assessee is in appeal before us. 15. We have heard the content ions of both the parties. U/s 14A petty expenditure which has been proved to h....