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2013 (8) TMI 925 - ITAT AHMEDABADAddition made on account of premium amortization expenses - Held that:- The allowability of amortized expenses on premium on Government Securities has been provided u/s. 36(1)(ii) of the provisions have been clarified and explained by CBDT, New Delhi vide Instruction No. 17 of 2008 dated 26.11.2008. As per this clarification, investments of banks classified under HTM (Held to Maturity) 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 amortized over the period remaining to maturity. On the basis of this Instruction, different Tribunals, as mentioned above by assessee, have allowed the amortized expenditure. The AO has ignored the provisions of Instruction which is binding on him while discussing the issue and disallowing the expenditure. Since, the Instructions and Circulars are binding in nature on AOs and different Tribunals have given decisions against the revenue, respectfully following the same, ground of appeal of assessee is allowed Addition made on account of Gift expenses - Held that:- As in the case Taluka Co-op. & Sale Union Ltd. (1980 (9) TMI 85 - GUJARAT High Court) where expenditure incurred for purchase of articles for presentation only to its members for keeping alive good image among members and for generating goodwill and ensuring continuity of business with member societies was geld to be expenditure incurred wholly and exclusively for the purpose of business. Addition made on account of Staff Ex-Gratia - Held that:- Since Ld. CIT(A) has given relief to the assessee in view of the fact that expenses being regularly incurred and claimed by the assessee and worked out on the basis of Memorandum of Understanding it is ascertainable liability which is allowable as per the provision of the Act, we are not inclined to interfere with the order passed by Ld. CIT(A) and the same is hereby upheld Addition made on account of disallowance of Special Long Term Finance Fund claimed u/s. 36(1)(vii) - Held that:- Since the finding of the Ld. CIT(A) that assessee has credited a sum of ₹ 17,50,000/- to the special reserve which is less than 20% of the profit remained uncontroverted at the time of hearing before us, we feel no need to interfere with the order passed by him and the same is hereby upheld. This ground of the revenue is also dismissed.
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