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2020 (1) TMI 1116 - HC - Income TaxMAT applicability to the assessee Banking Companies u/s 115JB - HELD THAT:- The machinery provisions provided in Sub- Section (2) of Section 115JB of the Act would be rendered wholly unworkable in case of a Banking company. It is also pertinent to mention here that the Companies Act, 1956 has excluded insurance, banking companies or the companies engaged in the generation or supply of electricity from the purview of Section 211(1) of the Companies Act, 1956 and resultantly from the purview of Section 115JB of the Act. To align the provisions of the Income Tax Act, 1961 with the Companies Act, 1956, it was decided to amend Section 115JB of the Act to provide that companies which are not required under Section 211 of the Companies Act, 1956 to prepare profit and loss account in accordance with Schedule VI of the Companies Act, 1956. Profit and loss account prepared in accordance with the provisions of their Regulatory Act shall be taken as basis for computing book profit under Section 115JB of the Act. We agree with the view taken inUNION BANK OF INDIA, MASHREQ BANK PSC, BANK OF INDIA, M/S THE NEW INDIA ASSURANCE CO. LTD., CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK [2019 (5) TMI 355 - BOMBAY HIGH COURT] on the common substantial question of law involved in these appeals. For the foregoing reasons, it is held that the provisions of Section 115JB(2) of the Act do not apply to the Banking companies. Amortization of investment “held to maturity”- allowable expenditure under Section 37(1) or not? - HELD THAT:- substantial question of law is squarely covered by instruction No.17/2008 dated 26.11.2008 issued by the Central Board of Direct Taxes/RBI and is covered by Clause (vii) provided therein. The decision in the case of SOUTHERN TECHNOLOGIES [2010 (1) TMI 5 - SUPREME COURT] was considered by a division bench of this court in KARNATAKA BANK LTD. [2013 (7) TMI 656 - KARNATAKA HIGH COURT] and it has been held that where the assessee maintains the accounts in terms of Reserve Bank of India Regulations, the assessee is entitled to deductions and it cannot be denied by the authorities under the pretext that it was showing as investment in the balance sheet. Accordingly, the common questions of law are answered in favour of the assessee
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