DCIT CIR 3, THANE v. THE THANE DISTRICT CENTRAL CO OPERATIVE BANK LTD, THANE

ITA 5065/MUM/2015 | 2011-2012
Pronouncement Date: 08-11-2017 | Result: Dismissed

Appeal Details

RSA Number 506519914 RSA 2015
Assessee PAN AAAAT0739N
Bench Mumbai
Appeal Number ITA 5065/MUM/2015
Duration Of Justice 2 year(s) 23 day(s)
Appellant DCIT CIR 3, THANE
Respondent THE THANE DISTRICT CENTRAL CO OPERATIVE BANK LTD, THANE
Appeal Type Income Tax Appeal
Pronouncement Date 08-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 08-11-2017
Assessment Year 2011-2012
Appeal Filed On 16-10-2015
Judgment Text
1 ITA NO. /MUM/201 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO. 5065/MUM/2015 (ASSESSMENT YEAR: 2011-12) DY.CIT CIRCLE-3 THANE VS THE THANE DISTRICT CENT RAL CO-OPERATIVE BANK LTD CHHATRAPATI SHIVAJI PATH POST BAG NO.19 THANE 400 601 PAN : AAAAT0739N APPELLANT RESPONDEDNT APPELLANT BY SHRI RAM TIWARI RESPONDENT BY SHRI ASHOK PATIL DATE OF HEARING 26-10-2017 DATE OF PRONOUNCEMENT 08-11-2017 O R D E R PER G MANJUNATHA AM : THIS IS AN APPEAL FILED BY THE REVENUE. THE APPE AL ARISES OUT OF THE ORDER DATED 30-07-2015 PASSED BY THE COMMISSIONER OF INCO ME-TAX (APPEALS)-2 THANE. THE REVENUE RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HON'BLE CIT(A) HAS ERRED IN ALLOWING THE EXPENDITUR E OF RS. 2 09 48 000/- ON AMORTIZATION OF PREMIUM ON GOVERNM ENT SECURITIES AS REVENUE EXPENDITURE AND NOT CAPITAL E XPENDITURE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HON'BLE CIT(A) HAS ERRED IN HOLDING THAT THE RBI GU IDELINES CAN TAKE 2 ITA NO. /MUM/201 PRECEDENCE OVER THE STATUTORY PROVISIONS OF THE LNC ORNTT61 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HONBLE 011(A) HAS FAILED TO OBSERVED THE DECISION O F APEX COURT IN THE CASE OF VIJAYA BANK LTD. VSADDL.CIT 4 THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT O F THE ASSESSING OFFICER MAY BE RESTORED. 2. THE ABOVE GROUNDS DEAL WITH ONE QUESTION AS TO WHET HER THE LD.CIT(A) WAS RIGHT IN ALLOWING THE EXPENDITURE OF RS.2 09 48 000 ON AMORTIZATION OF PREMIUM ON GOVERNMENT SECURITIES AS REVENUE EXPEN DITURE AND NOT CAPITAL EXPENDITURE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE A CO-OPERATIVE BANK REGISTERED WITH GOVERNMENT OF MAHARASHTRA IS ENGAGE D IN FUNCTIONING AS PERT THE FRAMEWORK OF BANKING REGULATIONS ACT 1949 COND UCTING BANKING OPERATIONS FROM RBI. DURING THE YEAR ASSESSEE HAS DEBITED AN AMOUNT OF RS.2 09 48 000/- IN ITS P&L A/C AS AMORTISED PROVIS ION FOR GOVT. SECURITIES. FOR THE ASSESSEMENT YEAR 2011-12 THE BANK HAS CLAIMED R S. 2 09 48 000/- AS AMORTIZATION OF PREMIUM PAID ON CENTRAL GOVERNMENT SECURITIES HELD UNDER HELD TO MATURITY CATEGORY (HTM HEREAFTER). THE P REMIUM IS A COST PAID OVER AND ABOVE THE FACE VALUE OF SECURITIES WHICH ARE PU RCHASED TO MAINTAIN STATUTORY LIQUIDITY RATION (SLR) AS A REGULATORY RE QUIREMENT IN BUSINESS OF BANKING UNDER BANKING REGULATION ACT 1949 AND AS PE R RBI REGULATIONS. THE ASSESSEE DURING THE YEAR HAS AMORTISED AN AMOUNT O F RS. 2 09 48 000/- IN ITS 3 ITA NO. /MUM/201 ACCOUNT. THE ASSESSING OFFICER DRAWING SUPPORT FR OM THE RBI CIRCULAR WHICH STATES THAT WHERE THE COSTY PRICE IS LESS THAN TH E FFACE VALUE THE DIFFERENCE SHOULD BE IGNORED AND SHOULD NOT BE AMORTISED OR TA KEN TO INCOME ACCOUNT SINCE THE AMOUNT REPRESENTS UNREALIZED GAIN REJECT ED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT WHEN THE EXCESS IS NOT TREATED AS INCOME THE DIFFERENCE CANNOT BE TREATED AS EXPENSE AS THE SAME GOES AGAINST THE ACCOUNTING STANDARD PRINCIPLES; JUST AS THE WAY THE GAIN (IN CASE OF EXCESS) IS TO BE REALIZED AT MATURITY SO ALSO THE DIFFERENCE HAS TO BE TREATED AS CAPITAL LOSS ON MATURITY AND THE SAME CANNOT BE CLAIMED AS A BU SINESS EXPENSE. FURTHER SECURITIES HELD IN HTM CATEGORY WAS NOT AVAILABLE F OR SALE AND HENCE A STOCK WHICH IS NOT TRADABLE COULD NOT BE HELD AS STOCK-IN -TRADE. BY OBSERVING SO THE ASSESSING OFFICER DENIED THE CLAIM OF THE ASSESSEE AND ADDED THE SAME TO THE TOTAL INCOME. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT(A). 4. BEFORE THE CIT(A) THE ASSESSEE FURTHER SUBMITTED AS UNDER:- 'THE LEARNED A.O. FAILED TO UNDERSTAND AND APPRECIA TE THAT AS PER THE BANKING DEFINITION ALL THE INVESTMENTS OF B ANK IN SECURITIES ARE STOCK-IN-TRADE CIRCULATING CAPITAL ONLY AND TH EY ARE NOT IN THE NATURE OF CAPITAL INVESTMENT. WHEREAS INTEREST INC OME EARNED BY APPELLANT BANK HAS BEEN ASSESSED AS BUSINESS INCOME IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY YOU R APPELLANT AND NOT AS INCOME UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. HENCE THE INVESTMENTS HELD UNDER HTM CATEGORY / IS STOCK-IN- TRADE/ CIRCULATING CAPITAL. THE THANE DIST CENTRAL COOP BANK LTD. A YR 2011-12 U/S 143(3) 0 4 ITA NO. /MUM/201 IN THE MATTER WE KEEP RELIANCE ON THE JUDGMENT OF ITAT MUMBAI IN CASE OF THE MSC BANK LTD. VS ASSTT. CIT (ITAT NOS. 7109 TO 711 9/MUM/ 97) AND ALSO A JUDGMENT GIVEN IN THE CASE OF CIT VS RATNAGIRI DIST. CENTRAL CO. OPERATIVE BANK LTD. (UN DER REF NO 414 OF 1997 MUMBAI HIGH COURT. THE LEARNED A.O. HAS WRONGLY INTERPRETED THE RBI CI RCULAR AND DRAWN ADVERSE CONCLUSION THAT 'HTM INVESTMENTS REQUIRED TO BE VALUED AT COST ONLY.' THE LEARNED A.O. HAS REFERRED THE RBI CIRCULARS AND INFERRED THE ADVERSE MEANING THAT INVESTMENTS/ SECURITIES HE LD UNDER HELD TO MATURITY CATEGORY ARE INVESTMENT IN THE NAT URE OF 'CAPITAL ASSETS' AND AMORTIZATION OF PREMIUM ON GOV T. SECURITIES OF RS. 2 09 48 0001- DISALLOWED AND ADDE D BACK TO INCOME WHICH IS COMPLETELY WRONG INCORRECT AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND BAD IN LAW. WE WOULD LIKE TO BRING TO YOUR HONOR'S KIND NOTICE THE CERTAIN IMPORTANT JUDGMENTS AND PRINCIPLES AS UNDER - A) JUDICIAL PRONOUNCEMENT AND CIRCULAR - THE LEARNED A. O. MERELY OVERLOOKING THE MATTER NOT CONSIDERED THE FACT THAT AMORTIZATION OF PREMIUM IN RESPECT OF INVESTMENT HELD UNDER HTM CATEGORY WAS IN ACCORDANC E WITH THE METHOD OF VALUATION PRESCRIBED BY RBI AND WAS CONSISTENTLY FOLLOWED BY THE APPELLANT. IN THE ABOVE MATTER WE PLACE RELIANCE ON JUDGMENT OF ITAT MUMBAI IN THE CASE OF ACIT V/S THE BANK OF RAJASTHA N LTD. B) THE DEFINITION OF BANKING - YOUR APPELLANT IS ENGAGED IN A BUSINESS OF BANKING AND THE 5 ITA NO. /MUM/201 'BANKING' HAS BEEN DEFINED U/S. 5(I)(B) OF BANKING REGULATION ACT 1949 AS - BANKING MEANS ACCEPTING FOR THE PURPOSE OF LENDING OR INVESTMENT OF ITS OF MONEY FROM PUBLIC REPAYABLE ON DEMAND OR OTHERWISE ANDWITHDRAWAL BY CHEQUE DRAFTS ORDER OR OTHERWISE. HENCE IT IS ONE OF THE PARTS OF ROUTINE BUSINESS O F BANKING TO DEPLOY ITS FINDS FOR PURCHASE RETAIN AND THEREAFTE R SALE OR GET REDEEMED THESE DEPLOYED FINDS IN THE FORM OF INVEST MENT. FORM THE DEFINITION OF BANKING AS ABOVE REFERRED IT IS CRYSTAL CLEAR THAT ALL KINDS TYPES AND NATURES OF INVESTMENTS MA DE BY BANK ARE IN THE NATURE OF STOCK-IN-TRADE CIRCULATING CAPITAL O NLY AND NOT AS CAPITAL INVESTMENTS WHICH THE LEARNED A. 0. HAS MIS INTERPRETED IS CASE OF YOUR APPELLANT. C) RBI CIRCULAR ON INVESTMENTS CLASSIFICATION - THE LEARNED A. 0. ERRED IN INTERPRETING THAT THE IN VESTMENT CLASSIFIED UNDER HTM CATEGORY CANNOT BE SOLD UNTIL IT'S MATURI TY. HOWEVER THE POINT NO. 15.2.3 OF RBI CIRCULAR NO. UBD.BPD(PCB).M .C.NO. 12/16.20.000/2012-13 ISSUED ON CLASSIFICATION OF IN VESTMENTS BY BANK READS AS UNDER - 'PROFIT ON SALE OF INVESTMENTS IN THIS CATEGORY (HTM) SHOULD BE FIRST TAKEN TO THE PROFIT & LOSS ACCOUNT AND THERE AFTER BE APPROPRIATED TO THE 'CAPITAL RESERVE ACCOUNT.' FROM THE ABOVE GUIDELINE ISSUED IN RBI CIRCULAR IT IS CRYSTAL CLEAR THAT THE INVESTMENT HELD UNDER HTM CATEGORY CAN BE SOLD EVEN BEFORE IT'S MATURITY AND NOT RESTRICTED IT'S SALE MATURITY ENCASHMENT. RBI GUIDELINES HAS BEEN ISSUED ONLY TO FACILITATE 'CLASSIFICATION AND DISCLOSURE' OF INVES TMENT TO BE MADE BY BANKS IN THEIR FINANCIAL STATEMENTS. D) CLASSIFICATION OF INVESTMENT UNDER INCOME TAX ACT - THE LEARNED A.0. MERELY LOOKING TO CLASSIFICATION O F INVESTMENT MADE AS PER RBI REQUIREMENT ADVERSELY CONCLUDED THE INVESTMENT IN HTM CATEGORY IS CAPITAL INVESTMENT IN NATURE. IT MAY BE NOTED 6 ITA NO. /MUM/201 THAT THE CLASSIFICATION OF INVESTMENT IN TO HTM AF S AND HFT CATEGORY AS PER RBI GUIDELINES IS ONLY FOR THE PURPOSE OF CO MPLIANCE OF DISCLOSURE REQUIRED BY RBI. FOR TAXATION PURPOSE I NVESTMENT OF BANK CONSTITUTE A STOCK-IN-TRADE CIRCULATING CAPITAL ON LY AS DECIDED BY VARIOUS COURTS IN VARIOUS JUDGMENTS CITED ABOVE. TH E MERE DISCLOSURE UNDER DIFFERENT HEADS ACCORDING CERTAIN STATUTORY REQUIREMENTS SHOULD NOT BE THE REASON TO TREAT STOC K-IN-TRADE AS CAPITAL INVESTMENT AND THEREBY ALTER INTENTION OF H OLDING INVESTMENT WHICH HAS BEEN HELD AS STOCK-IN-TRADE ONLY. IN THIS MATTER WE KEEP RELIANCE ON THE DECISION GI VEN BY HON'BLE SUPREME COURT IN THE CASE OF UCO BANK (240 ITR 355 . FURTHER THE LEARNED A.O. MERELY LOOKING TO HOLDIN G PERIOD TILL MATURITY OF INVESTMENT HELD UNDER HTM CATEGORY ADV ERSELY CONCLUDED THIS INVESTMENT AS CAPITAL INVESTMENT IN NATURE WHICH IS BEYOND REALITY AND INCORRECT. WE WOULD LIKE TO BRING YOUR HONOR'S KIND NOTICE THA T THE LEARNED A.O. FAILED TO UNDERSTAND THAT ALTHOUGH THE INVESTMENTS ARE CLASSIFIED UNDER HTM CATEGORY AND TO BE RETAINE D FOR A LONG PERIOD AS PER RBI REQUIREMENTS IT DOES NOT MEAN THA T THESE INVESTMENTS ARE CAPITAL INVESTMENT IN NATURE. THE L EARNED A.O. FAILED TO UNDERSTAND AND APPRECIATE THAT THERE ARE VARIOUS REASONS BEHIND HOLDING INVESTMENT FOR LONG PERIOD WHICH AR E IN NATURE OF CERTAIN STATUTORY REQUIREMENTS MARKET CONDITIONS A ND PRUDENCE IN MANAGING THE FUNDS OF THE BANK. THE INVESTMENT UNDE R HTM CATEGORY CAN BE OFFERED TO SELL AT ANY GIVEN POINT OF TIME AFTER DUE CONSIDERING THE STATUTORY REQUIREMENTS PREVAIL ING MARKET CONDITIONS OTHER PRUDENTIAL ACT AND BUSINESS EXIGE NCIES TO BE TAKEN AT THE TIME OF SALE. APPELLANT CAN SALE EN-CASH TH E SAID SECURITIES AT ITS OWN SWEET WILL AND THERE IS NO RESTRICTION ON T HE SAME. E) VALUATION OF INVESTMENT - THE LEARNED A.O. WITH BIAS MINDED ANALYZED RBI CIRC ULAR ON VALUATION OF INVESTMENT AND DRAWN A WRONG CONCLUSION THAT SIN CE INVESTMENTS HELD UNDER HTM CATEGORY NEED NOT MARKED TO MARKET IT HAS NOT BEEN VALUED AT COST OR MARKET PRICE WHIC HEVER IS LESS AND THEREFORE THE HTM INVESTMENT IS CAPITAL INVESTMENT IN NATURE. IN THIS REGARD WE WOULD LIKE TO BRING TO YOUR HONO R'S KIND NOTICE THAT 7 ITA NO. /MUM/201 EVEN IF THE STOCK-IN-TRADE IS CARRIED AT COST PRICE IT DOES NOT MEAN THAT IT IS CAPITAL INVESTMENT IN NATURE. THE VALUAT ION OF STOCK-IN- TRADE FOR THE PURPOSE OF INCOME TAX ACT IS TOTALLY GOVERNED U/ S. 145 A OF I. T. ACT 1961 WHICH STATES THAT 'THE VALUATION OF INVENTORY FOR THE PURPOSE OF DETE RMINING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION SHALL BE IN ACCORDANCE WITH THE METHOD O F ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE'. THE PRACTICE TO ACCOUNT THE PREMIUM PAID ON HTM SEC URITIES OVER REMAINING PERIOD OF DEBITING PROPORTIONATE UNREALIZ ABLE VALUE OF STOCK TO PROFIT&LOSS ACCOUNT THEREBY REDUCE THE BOO K VALUE OF STOCK (AMORTIZATION OF PREMIUM) HAS BEEN REGULARLY AND CO NSISTENTLY FOLLOWED BY THE BANK. HENCE AFTER DULY CONSIDERING THIS LEGAL PARAMETER IT IS CLEAR AND EVIDENT THAT HTM INVESTME NT IS STOCK- IN-TRADE CIRCULATING CAPITAL ONLY. HENCE AFTER DUE CONSIDERING VARIOUS STATUTORY AND JUDICIAL PRONOUNCEMENTS BUSINESS PRUDENCE AND ESTABLISHED L EGAL PROVISIONS THERE REMAINS NO SHADOW OF DOUBT THAT MERE DISCLOSU RE AND CLASSIFICATION AS PER CERTAIN NORMS OF ANY OTHER RE GULATORY AUTHORITY AND THE HOLDING PERIOD OF STOCK CANNOT CHANGE /ALTE R THE BASIC INTENTION OF HOLDING INVESTMENT AS A STOCK-IN-TRADE . THEREFORE IT IS CRYSTAL CLEAR THAT APPELLANT'S INV ESTMENT HELD UNDER HTM CATEGORY IS STOCK-IN-TRADE CIRCULATING CAPITAL ONLY. FURTHER WE WOULD LIKE TO BRING TO YOUR HONOR'S KIND NOTICE THAT THE PREMIUM PAID ON ACQUISITION OF INVESTMENT HELD UNDER HTM CATEGORY IS ALLOWABLE AS BUSINESS EXPENDITURE UNDER FOLLOWING GROUNDS EVEN - A) BUSINESS EXPENDITURE INCURRED AS PER ACT RULES AND RBI GUIDELINES - THE BANK HAS TO MAKE THE INVESTMENT IN CENTRAL GOVT . & STATE GOVT. SECURITIES FINANCIAL INSTITUTION BONDS TRUSTEE SE CURITIES BONDS ETC. IN ACCORDANCE WITH THE BANKING REGULATION ACT 1949 RBI GUIDELINES AND SECTION 70 OF MAHARASHTRA STATE CO-O P ACT 1960 IN ORDER TO MAINTAIN THE STATUTORY LIQUID RATIO (SL R) AND INVESTMENT 8 ITA NO. /MUM/201 OF FUNDS AND SURPLUS FUNDS WHICH AS A MANDATORY AND STATUTORY REQUIREMENT. THE BANK HAS IN ORDER TO ADHERE WITH THE RULES REG ULATION AND ACTS HAS TO PURCHASE THE SECURITIES FROM THE OPEN MARKET. ON MANY OCCASION BANK HAS TO PURCHASE THE SAID SECURITIES M ORE THAN THE FACE VALUE WITH PREMIUM. THE PREMIUM I.E. EXCESS OF AMOUNT PAID OVER FACE VALUE IS THEREAFTER RECOGNIZED AS EXPEND ITURE DURING THE REMAINING PERIOD OF HOLDING AND THIS PRACTICE I S A REGULARLY AND CONSISTENTLY FOLLOWED BY YOUR APPELLANT. AS STATED EARLIER AS PER RBI CIRCULAR THE SECURITI ES PURCHASED MORE THAN THE FACE VALUE WITH PREMIUM AND WHICH ARE CATE GORIES AS HELD TO MATURITY (HTM) THE PREMIUM PAID (OVER AND ABOVE FACE VALUE) REQUIRED TO BE AMORTIZED OVER THE REMAINING PERIOD OF THE PREMIUM IS RECOGNIZED AS PROPORTIONATE EXPENSES AS PER RBI CIRCULAR NO. RPCD. NO. BC. 154107 02.08194195 DT. 2310511995 . AS STATED IN THE SAID CIRCULAR THE BANK HAS TO AMORTIZE THE P ROPORTIONATE PREMIUM PAID ON PURCHASE OF SECURITIES. THE AMORTIZ ATION OF HTM INVESTMENT IS WITHIN THE COMPLIANCE OF DIRECTIVE IS SUED BY THE RESERVE BANK OF INDIA AND ACCOUNTING PRINCIPLES CON STANTLY FOLLOWED BY THE APPELLANT. B) ACCOUNTING AND REVENUE RECOGNITION PRINCIPLES - ACCORDING TO BASIC PRINCIPLES OF ACCOUNTING AND REV ENUE RECOGNITION AN EXPENDITURE ON PARTICULAR ASSET IS REQUIRED TO BE R ECOGNIZED AS EXPENSE IN PROFIT & LOSS ACCOUNT AS & WHEN AND ALSO IN A PR OPORTION IN WHICH IT STARTS TO EARN INCOME FOR THAT ENTERPRISE. HENCE WHEN THERE IS INCOME IN THE FORM OF INTEREST WHICH HAS BEEN OFFERED AS BUSINESS INCOME AND ALSO FOR TAXATION IT WILL BE ILLOGICAL AND AGAINST THE PRINCIPLE THAT NOT TO CLAIM DEDUCTION O F EXPENDITURE INCURRED TO EARN THAT INCOME. BECAUSE AT THE TIME OF MATURITY/ REDEMPTION DATE THE BANK WILL GET ONLY THE FACE VA LUE OF SAID SECURITIES AND THEREFORE THE PROPORTIONATE AMORTIZATION OF PR EMIUM PAID IS A ROUTINE BUSINESS EXPENDITURE INCURRED IN THE ROUT INE COURSE OF BUSINESS OF BANKING WHICH IS ALLOWABLE WITHOUT ANY SHADOW OF DOUBTS. C) PECUNIARY LOSS IN THE NATURE OF BAD DEBT - AS REFERRED ABOVE SINCE AT THE TIME OF MATURITY/ R EDEMPTION DATE THE THE THANE DIST CENTRAL COOP BANK LTD. A YR 2011-12 U/S 143(3) L8LPAGE 9 ITA NO. /MUM/201 BANK WILL GET ONLY THE FACE VALUE OF HTM SECURITIES AND THE AMOUNT OF PREMIUM PAID IN EXCESS OF FACE VALUE STANDS UNREALI ZABLE THIS UNREALIZABLE PREMIUM IS REPRESENTED AS LOSS (AMOUNT OF BAD DEBT) WHICH THE BANK PRACTICES TO WRITE-OFF OVER THE REMAINING PERIOD OF MATURITY. THEREFORE THE PROPORTIONATE AMORTIZATION OF PREMIU M PAID IS TO BE CONSIDERED AS A LOSS INCURRED (ON ACCOUNT OF BAD DE BT) IN ROUTINE COURSE OF BUSINESS OF BANKING. TO SUMMARIES THE ENTIRE MATTER AT THE END WE WOULD LIKE TO STATE AND EXPLAIN AS UNDER- 1. THE INVESTMENT HELD UNDER 'HTM' CATEGORY IS ONLY A CLASSIFICATION FOR THE PURPOSE OF COMPLIANCE WITH RBI GUIDELINES. IN ACTUAL SCENARIO THE ENTIRE INVESTMENTS OF THE BANK ARE ST OCK-IN-TRADE / CIRCULATING CAPITAL ONLY. 2. THE BASIC INTENTION EITHER TO RETAIN SALE OR ENCASH INVESTMENT IN OPEN MARKET UNDER NORMAL COURSE OF BUSINESS OF BANK ING CANNOT BE FOCUSING ONLY ON CLASSIFICATION / DISCLOSURE MADE A S PER RBI GUIDELINES. RBI ITSELF HAS ALLOWED SHIFTING OF POINT NO. VI OF RBI CIRCULAR IS ENOUGH SELF EXPLANATORY AND IT HAS MADE THE FACT CR YSTAL CLEAR THAT ALTHOUGH THE INVESTMENT IS HELD UNDER 'HTM' CATEGOR Y CAN ALSO BE SOLD EN-CASHED EVEN BEFORE IT'S MATURITY AS PER BU SINESS EXIGENCIES. 3. SINCE THE INTEREST INCOME RECEIVED FROM ALL THE IN VESTMENTS CONSTANTLY HAS BEEN OFFERED FOR TAXATION AS 'PROFITS AND GAINS FROM BUSINESS OR PROFESSION' AND THE SAME HAS BEEN ACCEPTED BY INCOME TAX DEPARTMENT FOR ALL THE YEARS INCLUDIN G THE CURRENT ASSESSMENT YEAR THEREFORE IT CANNOT BE CONCLUDE FO R THIS YEAR THAT INVESTMENT OF THE BANK HELD UNDER HTM CATEGORY IS C APITAL INVESTMENT IN NATURE. FROM THE ABOVE IT IS CRYSTAL CLEAR AND EVIDENT THAT THE BANK IS NOT UNDER ANY STATUTORY OBLIGATION TO HOLD ITS INVESTME NTS TILL MATURITY BUT THE HOLDING PERIOD OF INVESTMENT IS TOTALLY AT THE INTENTION AND SWEET WILL OF YOUR APPELLANT. IN THE MATTER WE PLACE THE RELIANCE ON THE JUDGMEN T IN CASE OF ACIT V/S THE BANK OF RAJASTHAN LTD. (2011 -TIOL-351TAT-M UM) REFERRED EARLIER AND UNDER THE THESE CIRCUMSTANCES AMORTIZATION OF PREMIUM ON GOVT. SECURITIES OF RS. 2 09 48 000/- BY YOUR APPELLANT IS A REVENUE EXPENDITURE AND ALLOWABLE AS A BUSINES S EXPENDITURE WITHOUT ANY SHADOW OF DOUBT.' THE THANE DIST CENTRAL COOP BANK LTD. A YR 2011-12 U/S 143(3) 10 ITA NO. /MUM/201 5. THE ABOVE SUBMISSIONS OF THE ASSESSEE FOUND FAVOUR WITH THE CIT(A) WHO DELETED THE ADDITION MADE BY THE AO. AGGRIEVED TH E REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE PARTIES. THE LD.AR OF THE ASSESS EE PLACED BEFORE US A COPY OF THE ORDER OF E-BENCH OF THE TRIBUNAL IN A SSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009-10 IN ITA NO.7513/MUM/2012 TO CONTEND THAT THE ISSUE STANDS COVERED IN ASSESSEES FAVOUR BY THE ABOVESAI D ORDER OF THE TRIBUNAL. WE FIND THAT THE BY FOLLOWING THE JUDGEMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS M/S GAJANAN NAGARI SAHAKARI BANK LTD (SUPRA) AND ALSO THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF THE KARAD JANA TA SAHAKARI BANK LTD VS THE TRO IN ITA NO.2150/PN/2013 FOR AY 2010-11 UPHELD T HE ORDER OF CIT(A) IN ALLOWING THE CLAIM OF EXPENDITURE ON ACCOUNT OF AMO RTIZATION OF PREMIUM ON SECURITIES. THE LD.DR HAS ACCEDED TO THE PROPOSITI ON. THEREFORE BEING CONSISTENT WITH THE ORDER OF THE TRIBUNAL WE DO NO T SEE ANY MERIT IN THE APPEAL FILED BY THE REVENUE. AS A RESULT THE ORDER OF CI T(A) IS UPHELD AND THE APPEAL FILED BY THE REVENUE DISMISSED. 11 ITA NO. /MUM/201 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH NOVEMBER 2017. SD/- SD/- (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DT : 08 TH NOVEMBER 2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR ITAT MUMBAI