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2015 (4) TMI 1123 - AT - Income TaxDisallowance of broken period interest - Held that:- The interest received on due date, without deducting the broken period interest paid, amounts to double taxation. According to AS 13, read with the I.T. Act, 1961, the preacquisition element of interest cannot be included in the cost of investment, as such the broken period interest is to be treated as revenue expenses. As relying on assessee's own case [2014 (3) TMI 724 - ITAT HYDERABAD] broken period of interest is an allowable expense - Decided against revenue Disallowance of amortization provided on Govt. securities - Held that:- As relying on assessee's own case [2014 (3) TMI 724 - ITAT HYDERABAD] HTM category constitutes stock in trade of the assessee bank, the method adopted by the assessee for amortizing the premium is as per the established accounting standards. The securities under HTM category is held by the assessee as stock in trade, the claim for amortization made by the assessee is valid - Decided against revenue Disallowance of contribution to the gratuity fund - Held that:- Section 43B permits a deduction in respect of any payment by way of' contribution to a provident fund or superannuation fund or any other fund for the welfare of employees in the year in which the liability is actually discharged. In the present case the appellant has not made any provision for gratuity U/s.40A(7) as on 31-03-2010 as the total amount has been paid on 31-03-2010 and accordingly the said payment of gratuity of ₹ 5,61,93,000/- is an allowable deduction U/s.43B of the I.T.Act, 1961 - Decided against revenue Disallowance of provision for staff fraud - addition on the ground that provision for frauds cannot be equated with provision for bad and doubtful debts, and frauds were not let off or written off normally and the embezzled money usually recovered - Held that:- As relying on assessee's own case [2014 (3) TMI 724 - ITAT HYDERABAD] staff frauds are similar to embezzlement by an employee and therefore qualifies as an allowable expenditure u/s 37 of the Act. The loss by embezzlement by employees should be treated as incidental to business and the same should be allowed as deduction in the year in which it is discovered - Decided against revenue Addition on account of treating the unrealized interest on NPAs as income - Held that:- Respectfully following the decision of the ITAT Hyderabad, in assessee’s own case [2014 (3) TMI 724 - ITAT HYDERABAD], the CIT (A) had no hesitation in holding that unrealized interest on NPAs constitute income to the assessee on the principle that the RBI directives were only in the context of presentation of NPAs in Balance Sheet and presentation of Balance Sheets have nothing to do with taxable income, which has to be computed as per the provisions of the Income Tax Act.- Decided against revenue
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