2025 (12) TMI 740

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....identical in both the appeals of the assessee, hence, we take ITA No. 33/PAT/2019 and decide the issue. A.Y. 2011-12 ITA No.33/PAT/2019 2. The issue raised in ground no.1, is general in nature and requires no adjudication. 3. The issue raised in ground nos.2 and 3 are against the order of learned CIT (A) confirming the addition as made by the learned AO on account of provision for amortization of premium paid on purchase of government securities of Rs. 34,18,516/. 3.1. The facts in brief are that the assessee is a bank constituted under Regional Rural Banks Act, 1976 and is engaged in carrying on business of banking activities and derives income from the business of bank activities as such. The assessee filed the return of in....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nder:- "7. We have carefully considered the rival submissions. Having considered the rival stands, we find no reason to interfere with the conclusion drawn by the CIT(A). Pertinently, assessee's claim for amortization of premium paid on the purchase of Government securities classified as HTM is consistent with the prudential norms issued by the RBI. It is also undeniable that the acquisition of the Government securities under the HTM categories has been undertaken by the assessee in the course of carrying on the 'banking business' under the mandate of RBI. Ostensibly, the predominant motive to purchase securities is to maintain the statutory liquidity ratio prescribed by the RBI. The Central Board of Direct Taxes vide its circular ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....aforesaid judgment of the Hon'ble Bombay High Court clearly supports the inference reached by the CIT(A), which we hereby affirm. 7.1 Before parting, we may refer to the judgment of the Hon'ble Madras High Court in the case of T.N Finance & Infrastructure Development Corporation Ltd.,280 ITR 491(Mad), which has been relied upon by the Assessing Officer in support of his stand that the RBI guidelines do not over-ride the statutory provisions of the Act and, thus, amortization claimed by the assessee on the investment held in the HTM category cannot be allowed as a deduction. We have perused the said judgment of the Hon'ble Madras High Court and find that the same does not help the case of the Revenue. Firstly, the assessee before th....