ACIT, Pune v. PUNE PEOPLES CO-OP BANK LTD., Pune

ITA 1847/PUN/2012 | 2009-2010
Pronouncement Date: 31-10-2013 | Result: Dismissed

Appeal Details

RSA Number 184724514 RSA 2012
Assessee PAN AAAAP6104H
Bench Pune
Appeal Number ITA 1847/PUN/2012
Duration Of Justice 1 year(s) 1 month(s) 10 day(s)
Appellant ACIT, Pune
Respondent PUNE PEOPLES CO-OP BANK LTD., Pune
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 31-10-2013
Assessment Year 2009-2010
Appeal Filed On 20-09-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE: SHRI G. S. PANNU ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO. 1847/ PN/201 2 ASSESSMENT YEAR : 2009 - 10 ACIT CIRCLE - 4 PUNE VS. PUNE PEOP LES COOP. BANK LTD. 606 SADASHIV PETH NEAR JAIHIND COLLECTION LAXMI ROAD PUNE (APPELLANT) (RESPONDENT) PAN NO. AAAAP6104H APPELLANT BY: SHRI P.L. PATHADE RESPONDENT BY: SHRI SUHASH P. B ORA DATE OF HEARING : 28 - 10 - 2013 DATE OF PRONOUNCEM ENT : 31 - 10 - 2013 ORDER P ER R.S. PADVEKAR JM : - IN THIS APPEAL THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT(A) - II PUNE DATED 28 - 05 - 2012 FOR THE A.Y. 2009 - 10. THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS: 1. THE LEARNED COMMIS SIONER OF INCOME - TAX (APPEALS) ERRED IN HOLDING THAT THE AMORTIZATION OF THE PREMIUM PAID ON SECURITIES WAS AN ALLOWABLE EXPENDITURE U/S. 37 OF THE INCOME - TAX ACT 1961. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN FAILING TO APPRECIATE THAT THE SECURITIES HELD BY THE ASSESSEE FALLING IN THE HTM CATEGORY WERE CAPITAL ASSET AND THEREFORE WERE SUBJECT TO CAPITAL GAINS OR LOSS AT THE TIME OF REDEMPTION AND THE PREMIUM PAID ON THESE SECURITIES BY NO MEANS WAS AN EXPENDITURE OF REVENUE NATURE. 2. THE SHORT ISSUE FOR CONSIDERATION BEFORE US IS WHETHER THE PREMIUM PAID ON THE SECURITIES IS ALLOWABLE BY WAY OF AMORTIZATION. THE BRIEFLY STATED FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE IS A CO - OPERATIVE BANK ENGAGED IN THE B USINESS OF BANKING. AS 2 ITA NO. 1847/PN/2012 PUNE PEOPLES COOP. BANK LTD. PUNE NOTED BY THE ASSESSING OFFICER THE ASSESSEE IS A SCHEDULED CO - OPERATIVE BANK. THE ASSESSEES CASE FOR THE A.Y. 2009 - 10 WAS SELECTED FOR SCRUTINY AND ASSESSMENT HAS BEEN COMPLETED U/S. 143(3) OF THE INCOME - TAX ACT. IT WAS NOTICED B Y THE ASSESSING OFFICER THAT THE ASSESSEE CLAIMED THE EXPENSES ON ACCOUNT OF AMORTIZATION OF PREMIUM ON INVESTMENT TO THE EXTENT OF RS.45 67 178/ - . THE ASSESSEE STATED BEFORE THE ASSESSING OFFICER THAT THE SAID ISSUE IS COVERED IN HIS FAVOUR BY THE DECISI ON OF THE CIT(A) FOR THE A.Y. 2008 - 09 . THE MAIN CONCERN OF THE ASSESSING OFFICER IS THAT SECURITIES ON WHICH THE PREMIUM HAS BEEN PAID ARE HELD IN THE CATEGORY OF HTM WHICH ACCORDING TO THE ASSESSING OFFICER ARE IN THE NATURE OF CAPITAL ASSETS. THE ASSES SING OFFICER THEREFORE DISALLOWED THE CLAIM OF THE ASSESSEE U/S. 37(1) OF THE ACT TREATING THE PREMIUM PAID ON SECURITIES HELD UNDER HTM CATEGORY AS CAPITAL EXPENDITURE. THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE. NOW THE REVENUE IS IN APPEAL BE FORE US. 3. WE FIND THAT IDENTICAL CLAIM WAS MADE BY THE ASSESSEE IN THE A.Y. 2008 - 09 WHICH WAS DISALLOWED BY THE ASSESSING OFFICER AND ALLOWED BY THE CIT(A). THE MATTER WAS TRAVELLED TO THIS TRIBUNAL BY WAY OF APPEAL BEING ITA N O . 1413/PN/2011 VIDE ORDE R DATED 08 - 08 - 2013 THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE LD. CIT(A) . WE THEREFORE FOLLOWING THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE UPHOLD THE ORDER OF THE CIT(A). WE ALSO FIND THAT THIS ISSUE ALSO STANDS COVER ED IN FAVOUR OF THE AS SESSEE BY THE DECISION S OF THIS TRIBUNAL IN THE CASE S OF THE RATNAKAR BANK LTD. KOLHAPUR VS. ACIT BEING ITA NO. 789/PN/2010 ORDER DATED 08 - 02 - 2013 AS WELL AS LATUR URBAN CO - OPERATIVE BANK LTD. LATUR VS. DCIT NANDED BEING ITA NOS. 77 8 & 792/PN/2011 ORDER DATED 31 - 08 - 2012. THE OPERATIVE PART OF THE FINDING OF THE TRIBUNAL IN THE CASE OF LATUR URBAN CO - OPERATIVE BANK LTD. (SUPRA) AND HAS HELD AS UNDER: 15. IN THE CASE OF UNITED COMMERCIAL BANK (SUPRA) EVEN THE ISSUE OF VALUATION OF THE STOCK IN TRADE OF THE INVESTMENT WAS BEFORE 3 ITA NO. 1847/PN/2012 PUNE PEOPLES COOP. BANK LTD. PUNE THE HONBLE SUPREME COURT. IN THE CASE OF THE ASSESSEE THE ISSUE IS REGARDING ALLOWABILITY OF THE LOSS ON THE SALE OF THE SECURITIES. MERELY BECAUSE THE SECURITIES ARE KEPT UNDER THE HEAD TILL THE MATURITY THE SAID SECURIT Y CANNOT BE TREATED AS A PURELY INVESTMENT. LAW IS WELL SETTLED THAT THE SECURITIES HELD BY THE BANK ARE IN THE NATURE OF STOCK - IN - TRADE. WE MAY LIKE TO QUOTE HERE THE DECISION OF THE HONBLE HIGH COURT OF KERALA IN THE CASE OF CIT VS. NEDUNGADI BANK LT D. 264 ITR 545. IN THE SAID CASE THE HONBLE HIGH COURT HAS HELD THAT THE SECURITIES HELD BY THE BANK ARE IN THE NATURE OF STOCK - IN - TRADE. BOTH THE AUTHORITIES BELOW HAS MERELY GONE ON THE NOMENCLATURE OF THE HEAD UNDER WHICH THE SECURITIES ARE HELD. I N OUR CONSIDERED VIEW NOMENCLATURE CANNOT BE DECISIVE FOR THE ASSESSEE BANK. WE THEREFORE HOLD THAT THE LOSS ON THE SALE OF THE SECURITIES IS REVENUE IN NATURE AND SAME IS ALLOWABLE. ACCORDINGLY GROUND NO. 2 IS ALLOWED. 4. WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) . A CCORDINGLY SAME IS CONFIRMED AND THE GROUNDS TAKEN BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT THE REVENUES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 31 - 10 - 2013 SD/ - SD / - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE DATED : 31 ST OCTOBER 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - II PUNE 4 THE CIT - II PUNE 5 THE DR ITAT A BENCH P UNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE