2013 (11) TMI 1735

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....ground of being in the nature of Capital expenditure. 2. The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing. 2. At the outset of hearing, learned Authorized Representative pointed out that this issue is covered in favour of assessee by the order of ITAT, Pune Bench in the case of Nashik Merchants Cooperative Bank Ltd., in ITA No.1254/PN/2011, wherein the Tribunal has decided the issue in favour of the assessee by observing as under: "4. After going through rival submissions and material on record we find that with the advent of section 80P(4) w.e.f. A.Y. 2007-08 has closed the doors for cooperative banks for claiming the benefit of deduction u/s.80P(2)(a)(i) from this total income.....

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....like other commercial banks are subjected to dual control from both RBI as well as from state cooperative department. The accounting treatment for a cooperative bank is therefore a result of guidelines from both the controlling authorities. Ordinarily a deduction is not available to an assessee unless specifically provided under the Act. This is irrespective of accounting treatment provided by the assessee in its books of accounts. But at the same time it was well settled that deduction expressly mentioned under the Act are not exhaustive and profit is to be derived according to ordinary commercial principles. As per the extant RBI guidelines dated 01-07-2009 the investment portfolio of the banks is required to be classified under 3 categor....

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....tegories viz. Held to Maturity (HTM), Held for Trading (HFT) and Available for Sale (AFS). Investments classified under HTM category need not be marked to market and are carried at acquisition cost unless these are more than the face value, in which case the premium should be amortised over the period remaining to maturity. In the case of HFT and AFS securities forming stock in trade of the bank, the depreciation/appreciation is to be aggregated scrip wise and only net depreciation, if any, is required to be provided for in the accounts. The latest guidelines of the RBI may be referred to for allowing any such claims." 8. The ITAT, Mumbai Bench, in the case of ACIT vs. The Bank of Rajasthan Ltd. (2011) TIOL-35-ITAT-Mumbai, has held that i....