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2015 (5) TMI 867 - HC - Income Tax


Issues:
1. Appeal against judgment passed by Income Tax Appellate Tribunal for A.Y. 2007-2008.
2. Allowance of amortization of premium paid on investments under "held to maturity category" as revenue expenditure.

Analysis:
1. The appellant, the revenue, filed two Tax Appeals against the judgment of the Income Tax Appellate Tribunal regarding the allowance of amortization of premium paid on investments under the "held to maturity category" as revenue expenditure for A.Y. 2007-2008. The proposed substantial questions of law in both appeals questioned the justification of the ITAT's decision in allowing the mentioned amounts as revenue expenditure.

2. The High Court noted that the issue raised in the present tax appeal had already been conclusively decided in favor of the assessee in a previous case involving the Rajkot Dist.Co-op. Bank Ltd. The Court referred to paragraph (vii) of the CBDT Circular No.17 of 2008 and held that the assessee is entitled to the amortization of security premium as claimed. The counsel for the revenue could not provide any contrary decision to challenge the Division Bench's decision in the Rajkot Dist.Co-op. Bank Ltd. case.

3. Based on the binding decision of the Division Bench and the reasoning provided in the Rajkot Dist.Co-op. Bank Ltd. case, the High Court dismissed the appeals filed by the revenue. The Court concluded that the ITAT did not err in allowing the amortization of security premium claimed by the assessee, especially considering the precedent set by the Division Bench in the Rajkot Dist.Co-op. Bank Ltd. case.

4. Consequently, the High Court dismissed both appeals, affirming the decision in favor of the assessee regarding the allowance of amortization of premium paid on investments under the "held to maturity category" as revenue expenditure. The Court found no grounds to rule in favor of the revenue based on the existing legal precedents and the absence of contradictory decisions presented during the proceedings.

 

 

 

 

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