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2014 (5) TMI 806 - AT - Income TaxDeletion of claim of expenses - Amortization of premium on investment – Held that:- The AO from the P&L account of bank, observed that an amount was debited under the head Investment Premium Amortization - Following ACIT Vs. Bank of Rajasthan Ltd. [2010 (12) TMI 894 - ITAT, Mumbai] - in the case of bank premium paid in excess of the face value of investments classified under HTM category which has been amortized over a period till maturity is allowable as revenue expenditure since the claim is as per RBI guidelines and CBDT has also directed to allow the said premium - instruction and guidelines issued by the CBDT and RBI, amortization of premium paid on government securities is allowable expenditure - CIT(A) was justified in deleting the disallowance – Decided against Revenue. Disallowance of expenses claimed under education fund – Held that:- The assessee is a cooperative bank, has paid contribution to the Education Fund of State Government as per guidelines of Commission of Cooperative Department - The contribution fund is mandatory on the part of every cooperative bank registered in the State of Maharashtra - The assessee has demonstrated that as per Cooperative Society Act, any order or instruction issued by the Govt. of Maharashtra is mandatory on the part of cooperative society / cooperative bank - the bank has to work under the control of Commissioner of Cooperation, Maharashtra - the order issued by the Commissioner is obligatory on the bank - CIT(A) rightly held that the contribution paid by bank is a business expenditure wholly exclusively incurred for the purpose of business and accordingly, allowable u/s.37(1) of the Act – the reasoned finding of CIT(A) has deleted the addition made on account of contribution to the Education Fund – Decided against Revenue.
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