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2012 (11) TMI 336 - AT - Income TaxAmortization of premium on purchase of Government securities - Held that:- Amortization was made as per the prudential norms of the RBI. Following the Tribunal decision in the assessee's own case and considering that the assessee bank is following consistent and regular method of accounting system, there is no justification in interfering with the order of the Commissioner of Income-tax (Appeals) on this issue of amortization of premium on government securities. - Decision in M/s. Sir M. Visweswaraya Cooperative Bank Ltd., Versus Joint Commissioner of Income-tax, Range-3, Bangalore [2012 (9) TMI 774 - ITAT, BANGALORE] followed. Further, Premium amortized is claimed to be in respect of securities held under the category 'held to maturity'. The Assessing Officer has taken them as long term investments. In other words, he has accepted the assessee's claim that the securities are 'held to maturity'. That being so and having regard to the CBDT Instruction No.17 of 2008 dated.26.11.2008 as reproduced herein above, the premium paid on such government securities is required to be amortized over the period remaining to maturity - assessee is entitled to claim this deduction – appeal of assessee is allowed.
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