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2014 (1) TMI 1696 - AT - Income TaxEntitlement to deprecation on acquisition of an intangible business asset - whether business/ commercial advantages, namely, taking over of huge client base, licenses, operational bank branches in different areas, etc. can be considered to fall within the expression “business or commercial rights of similar nature” contained in section 32(1)(ii)? - Held that:- The acquisition of rights over the assets of the transferor, inclusive of its customers base was held to be an ‘intangible asset’ being ‘business or commercial rights of similar nature’ contemplated in section 32(1)(ii) of the Act and was held eligible for depreciation. Following the aforesaid discussion, in the present case, the business advantages detailed earlier, are liable to be considered as an intangible asset, being ‘business or commercial rights of similar nature’ contemplated u/s 32(1)(ii) of the Act. In our considered opinion, the plea of the assessee for allowance of depreciation in terms of section 32(1)(ii) of the Act cannot be faulted either in law or on facts.The other objection of the CIT(A) to the effect that the amalgamation in question is not by way of purchase but is an amalgamation by merger, in our view, is no ground to deny the claim of the assessee, which is otherwise well founded. - Decided in favour of assessee Securities held under Held to Maturity (HTM) category - whether constitute its stock-in-trade and the consequential loss on valuation of the said securities as on 31.03.2007 on the basis of cost or market value whichever is lower (on the basis of individual scrip) is an allowable deduction? - Held that:- So far as securities held under HTM categories are concerned, the Pune Bench of the Tribunal in the case of Latur Urban Coop. Bank Ltd. (2015 (3) TMI 920 - ITAT PUNE ) held that such securities held by an assessee bank are part of its stock-in-trade. Following the aforesaid decision we are unable to uphold the plea of the Revenue that the securities held by the assessee under the HTM category are capital in nature. Both the authorities below has merely gone on the nomenclature of the head under which the Securities are held. Thus 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. - Decided in favour of assessee Provision made by way of debit to Profit and Loss Account under the head ‘contingent provisions against standard asset’ - Held that:- Factually, it is not in dispute that the impugned claim is a contingent Provision made on the basis of a percentage on the value of standard assets. The Provision does not reflect any particular debt which is doubtful or bad and it is only a general and non-specific Provision and it has been rightly classified as a contingent provision by the income-tax authorities. In-fact, the learned counsel for the assessee, at the time of hearing, fairly conceded the contingent nature of the provision and therefore the lower authorities made no mistake in disallowing the same in view of the judgment of the Hon’ble Supreme Court in the case of Southern Technologies Ltd. ( 2010 (1) TMI 5 - SUPREME COURT OF INDIA ).- Decided against assessee Disallowance invoking section 43D - computation of interest in relation to categories of bad and doubtful debts, which in terms of section 43D of the Act is chargeable to tax in the previous year in which such interest is credited or is actually received by the bank, whichever is earlier - Held that:- The guidelines issued by the RBI and the methodology prescribed in rule 6EA of the Rules are at variance and the Revenue has sought to compute the interest income on the basis of methodology contained in rule 6EA of the Rules.Ostensibly, a similar controversy has been considered by the Mumbai Bench of the Tribunal in the case of GIC Housing Finance Ltd. (2011 (2) TMI 40 - ITAT, MUMBAI ) wherein the stand of the Revenue has been upheld. Before us, the learned counsel has not brought out any decision to the contrary either of the Tribunal or of any High Court which would require us to deviate from the decision of Mumbai Bench of the Tribunal in the case of GIC Housing Finance Ltd. (supra).- Decided against assessee
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