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2015 (8) TMI 173 - AT - Income TaxDisallowance of claim made u/s.10(23G) - failure to produce the necessary certificate required under the said section - assessee is a scheduled bank and carries on banking business - Held that - The limited request of the learned counsel for the assessee was that the necessary approvals from the CBDT is available and will be provided to the Assessing Officer. He prayed that the order of the Assessing Officer may be set aside and the assessee allowed opportunity of providing the necessary approvals for grant of exemption u/s.10(23G) of the Act. We are of the view that it would be just and appropriate to set aside the addition made by the Assessing Officer in this regard and allow opportunity to the assessee to produce the required certificate which will enable the assessee to claim exemption u/s.10(23G) of the Act. - Decided in favour of assessee for statistical purpose. Disallowance of expenditure claimed for software - revenue v/s capital expenditure - Held that - Respectfully following the decisions of the Hon ble High Court of Karnataka in the case of IBM India Ltd. (2013 (10) TMI 1225 - KARNATAKA HIGH COURT ) and the coordinate bench of this Tribunal in the assessee s own case for Assessment Year 2001-02 we hold that the expenditure incurred by the assessee for purchase of application software is revenue in nature - Decided in favour of assessee. Disallowance of expenditure incurred for employee stock option plan - Held that - We set aside the orders of authorities below and remit the issue back to the AO for considering it afresh in the light of directions given by of the Tribunal in A. Y. 2004-05 wherein held the claim of the assessee for deduction has to be allowed in principle. - Decided in favour of assessee for statistical purpose. Expenditure relating to rights issue disallowed u/s.35D - Held that - Evidently the sum of Rs. 5, 37, 45, 182/- from which the AO started his computation and made the disallowance did include income of Rs. 3, 53, 58, 063/- from business which amount was arrived at after adding back the inadmissible operating expenditure which inter alia included the rights issue expenditure of Rs. 1, 38, 98, 183/-. In other words when the AO made an addition of Rs. 1, 65, 83, 020/-. The result was that what was already suo motu added back by the assessee was once again aggregated as pointed out by the Ld. AR. This had resulted in a double disallowance. Hence the disallowance of Rs. 1, 38, 19, 183/- is deleted. However in respect of the balance amount of Rs. 27, 63, 837/- as admitted by the Ld. AR in the case of Andhra Bank (2013 (4) TMI 701 - ITAT HYDERABAD ) this Tribunal had held that amortisation of rights issue u/s.35D of the Act in the years prior to A. Y. 2009-10 was not allowable. Therefore the disallowance to the extent of Rs. 27, 63, 837/- has been rightly made and is hereby confirmed. - Decided against assessee. Application of Sec.115JB - MAT applicability - whether the banking companies were not required to prepare their accounts in accordance with Parts II & III of the Companies Act 1956? - Held that - On a perusal of the cited decision in the assessee s own case for Assessment Year 2002- 03 we find that the issue of whether or not the provisions of section 115JB of the Act are applicable to Banks has been considered and held in favour of the assessee to hold that provisions of section 115JB of the Act are not applicable to the assessee which is a banking company. - Decided in favour of assessee. Addition of claim of dimunition in value of investment - CIT(A) deleted addition - Held that - The facts of the assessee in the case on hand are similar to that of the cited case i.e. Corporation Bank Ltd. (2012 (9) TMI 753 - ITAT BANGALORE) followed by the learned CIT (Appeals) in the impugned order we concur with the decision of the learned CIT (Appeals) in allowing the assessee s claim of diminution in the value of investments under the AFS/HFT categories - Decided in favour of assessee. Depreciation on conversion of securities - CIT(A) allowed claim - Held that - In view of the clear-cut guidelines of the RBI the claim of the assessee towards provision of depreciation on account of transfer of securities from AFS category to HTM category is allowed.- Decided in favour of assessee. Disallowance of insurance premium paid on housing loans of customers - CIT(A) deleted addition - Held that - We concur with the finding of the learned CIT (Appeals) in the impugned order that the expenditure incurred on insurance premium on housing loan are revenue in nature and is an allowable deduction. It is not the case of the Assessing Officer that these expenses are not for the purposes of the assessee s business or that they are capital in nature. These expenses are related to the housing products which are very much a part of the assessee s business activities and the payment of insurance premium on the housing products is also not capital in nature. Once the expenditure is accepted to be revenue in nature and incurred for the purposes of business then it is allowable in the year in which it is incurred. Thus we concur with the finding of the learned CIT (Appeals) that the expenditure incurred as insurance premium in connection with their housing loan scheme is revenue in nature and is eligible for deduction - Decided in favour of assessee. Addition made for broken period interest - Addition deleted by the CIT (A) - Held that - Broken period interest does not constitute income in the year under consideration as it has not become due and payable / receivable as per the provisions of the Act. - Decided in favour of assessee.
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