TaxTMI 
TaxTMI 
2025 (4) TMI 2032
X X X X Extracts X X X X
X X X X Extracts X X X X
....d proceed to decide the appeal. 3. Briefly stated, the facts of the case are that the assessee is a Cooperative Bank engaged in the business of carrying on banking business. It filed its return of income on 29.09.2012 for AY 2012-13 declaring the total income of Rs. 12,59,58,432/-. The return was processed u/s 143(3) of the Income Tax Act, 1961 (the "Act") by the DCIT, Ahmednagar dated 31.03.2015 on a total income of Rs. 13,31,52,365/- by making following additions : 1 Amortization of premium in respect of Govt. Securities Rs. 4,63,808/- 2 Amounts directly credited in Reserve Account Rs. 66,36,159/- 3 Unclaimed amount Rs. 26,43,370/- 4 Unpaid dividend Rs. 20,05,137/- 5 Excess Cash Rs. 83,192/- 6 Entrance Fee Rs. 19,560/- 7 Nominal Fee Rs. 18,84,900/- 8 Addition u/s. 41(1) of the IT Act Rs. 93,966/- 4. Being aggrieved by the above additions made by the Ld. Assessing Officer ("AO"), the assessee preferred an appeal before the Ld. CIT(A) by raising the following two grounds of appeal in Form No. 35: "1. That the learned Dy. Commissioner of Income Tax Ahmednagar Circle Ahmednagar has erred on the fac....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 7. The assessee challenged the order of the Ld. CIT(A) before the Tribunal and the Tribunal vide order dated 24.03.2021 restored the issue to the file of the Ld. CIT(A) with a direction to adjudicate the issues raised in additional grounds of appeal on merit in accordance with law after affording due opportunity of being heard to the assessee. 8. Accordingly, the Ld. CIT(A) issued statutory notice in response to which the assessee filed its submissions. However, the Ld. CIT(A) was not satisfied with the arguments advanced by the assessee and dismissed the appeal by observing as under : "6. I have considered the additional grounds of appeal no. 2 and 3 as directed by Hon'ble ITAT, and perused the material available on record. I have also considered the contentions of the appellant as brought out in the Appellate order u/s 250 dated 20.07.2017 in its own case as well as the written submissions dated 19.10.2022 and 13.11.2023 filed before me. 7. The subject matter of the present proceedings is the additional grounds of appeal no. 2 and 3, which were not adjudicated by the then Ld. CIT (Appeals) on two counts. Relevant part of the order dated 20.07.2017 of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....jected as there was no mistake apparent from record. Having tried all possible remedies before the assessing authority, the appellant raised the two additional grounds in question during the appellate proceedings in the first round. 10. This is not a case where the appellant/assessee made a fresh claim for the first time before the CIT (Appeals) by way of additional grounds. In the remand report dated 18.04.2017, the AO has given a categorical finding that the additional evidences produced before the CIT (Appeals) were also submitted during the assessment proceedings and that the additional claims in question pertaining to the depreciation on the Government Securities and exemption of dividend income were not supported with any documentary evidences. This categorical finding of the AO in the remand report clearly shows that the appellant raised the two claims in question during the assessment proceedings and that the additional evidences were considered and rejected by the AO as 'insufficient' to allow the claims in question. 11. Adjudication of the two additional grounds in question require examination of financial statements and books of account of the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the facts as found by the authorities below and having a bearing on the tax liability of the assessee. No such question of law (which is going to the core of the matter) is emerging out of the facts of the present case. Further, no new evidences than those already produced before the Assessing Officer were produced before me. 13. In view of the above factual matrix, in spite of taking up the additional grounds of appeal no. 2 and 3 for adjudication on merits in obedience of the direction of Hon'ble ITAT, I am unable to allow these grounds in favour of the appellant, for the simple reason that the evidences in this regard were already considered and rejected by the AO as insufficient and that the appellant has not brought any new evidences before me. Therefore, the additional grounds of appeal no. 2 and 3 are dismissed. 14. In the result, the appeal is dismissed." 9. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising following grounds of appeal : "1. That the learned CIT (A) NFAC Income Tax Department has erred on the facts and in law in dismissing the appeal which was before him for fresh adjudica....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the submissions along with necessary evidences as asked by the A.O from time to time. During the course of hearing the appellant came to know that while preparing computation of total income the expenses on account of Depreciation on Govt. Securities debited to P & L A/c at Rs. 11200000/- were added to the net profit however as the same were eligible as expenses, remained inadvertently to be deducted from the total income and also the income earned as Dividend on Investment in Mutual Fund at Rs. 1487135/- were remained to be claimed as exempt. As the time limit for filing of revised return was over the appellant filed a letter Dt. 09/02/2015 along with revised computation of total income before the A.O stating all these facts and requested the A.O to allow all these claims while framing the assessment order. The AO did not accept the said claim on ground that: No revised returns have been filed. The A.O along with other additions disallowed our claimed made during the course assessment. The assessment order was agitated in appeal, in appeal the other additions were deleted, however the claim made for allowance of: Depreciation o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eciation of Govt. Securities is concerned, the Tribunal has considered the said aspect considering that the coordinate Bench has already taken such a view so also have considered the regular practice adopted by the Bank of seeking depreciation on such securities as is held by the judgement of Apex Court in the case of United Commercial Bank. (Copy enclosed) We also rely on the other High Court's Decisions: Kerala Heard both the parties. Case file perused. CIT V/s Nedungdi Bank Ltd., 182 CTR 0403. CIT V/s Lord Krishna Bank Ltd., 339 ITR 0606. Karnataka Н.С. Karnataka Bank Ltd V/s Asstt. Com of Income, 356 ITR 0549. In the above case the Dept.'s SLP was rejected SLP(c) no 17458 of 2015. CIT V/s Corporation Bank. The Department's SLP SLP No. 15887 of 2019 have also been dismissed by the Apex Court. In view of the above stated facts and case laws and jurisdictional Bombay High Court's decision in our own case it is submitted that the expenses debited under the head Provision for Depreciation on Govt. Securities of Rs. 11200000/- be allowed. 2. Ground N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s i.e. allowance of claim of depreciation on Government Securities and dividend income from mutual funds are not in dispute. During the assessment proceedings before the Ld. AO, the assessee filed revised computation of total income bringing on record the fact that while preparing the original computation of total income, expenses on account of depreciation on Government Securities debited to the profit and loss account, of Rs. 1,12,00,000/- were added to the net profit. However, as the same were eligible as expenses they remained inadvertently to be reduced from the total income. Also, dividend income earned on investment in mutual funds amounting to Rs. 14,87,135/- remained to be claimed as exempt. The Ld. AO disallowed the above claims of the assessee on the ground that the assessee failed to furnish the revised return, the same being time barred and framed the assessment by making addition of Rs. 1,12,00,000/- and Rs. 14,87,135/- on account of disallowances of depreciation on Govt. Securities and dividend income on mutual funds, respectively. On appeal before the Ld. CIT(A), the assessee failed to succeed which led to the filing of the instant appeal before the ITAT. Earlier, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng to claim of depreciation on Govt. Securities amounting to Rs. 1,12,00,000/- and dividend income on mutual funds of Rs. 14,87,135/- based on the material available on record, as in our view, no new additional evidences have been brought on record by the assessee at this stage. 13. As regards, the claim of depreciation on Govt. Securities amounting to Rs. 1,12,00,000/-, the Ld. AR submitted that the impugned issue is covered in favour of the assessee by the decision of the Co-ordinate Bench of the Tribunal in assessee's own case for AYs 2008-09 and 2011-12 and the decision of the Hon'ble Bombay High Court in the appeal filed by the Revenue in ITA No. 60 of 2014 dated 27.03.2015. We have perused the order of the Tribunal in ITA Nos. 280 & 281/PN/2015 for AYs 2008-09 and 2011-12 in assessee's own case dated 12.02.2016. The relevant observations and findings of the Tribunal in the said case is reproduced below : "6. We have heard the submissions made by the Ld. Departmental Representative and perused the material available on record. We have also considered the decision of Coordinate Bench of the Tribunal in ITA No. 1982/PN/2013 (Supra). The solitary ground raised in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Rs. 14,70,000/- is debited to the Profit & Loss A/c on account of loss on sale of securities. The A.O has further observed that the assessee in its submission has stated that securities of the Bank are held under the head "to maturity category" and, therefore, loss arising on the sale of investment is in the nature of capital loss and 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 (2003) 262 ITR 334 (Bom), 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. 11,82,35,007/- and the said depreciation was claimed as a deduction which was disallowed by the A.O, but....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted accordingly." 19. The issue arising before us is similar to the issue before the Tribunal in assessee's own case in assessment year 2009-10 and following the same parity of reasoning, we uphold the order of CIT(A) in allowing the deduction on account of amortization premium paid on Government securities. The grounds of appeal Nos.1 to 8 raised by the Revenue are thus, dismissed." 23. We find that the Tribunal had allowed the claim of the assessee, wherein, in turn, relying the order of the Tribunal in Nagar Urban Cooperative Bank Ltd. (supra). Following the same parity of reasoning, we uphold the order of the CIT(A) in allowing the deduction on account of amortization of premium paid on HTM securities at Rs. 10,00,000/-. The grounds of appeal No.2 to 6 raised by the Revenue are thus, dismissed." 7. The Ld. Departmental Representation has not placed any material on record to controvert the finding of the Tribunal. Respectfully following the above decision of the Coordinate Bench, we direct the AO to delete the addition of Rs. 15,11,333/- on account of amortization of premium paid on Government Securities. 8. In the result, the impugned order i....