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2018 (8) TMI 1558 - HC - Income TaxBad debts - Status of the assessee as “Scheduled Bank” - the name of the assessee bank was not reflected in the second schedule of the Reserve Bank of India Act, 1934, as on date of assessment - disallowance of deduction of bad debts u/s 36(1)(viia)(a) - Held that:- There were three Gramin banks. All of which were duly notified as scheduled banks as per the Government notification dated 02.01.2006 all these three banks were amalgamated under a Government notification bringing into existence Saurashtra Gramin Bank i.e. the present respondent-assessee. On account of such facts, Commissioner of Income Tax (Appeals) and the Tribunal concurrently held that the respondent bank would also be a scheduled bank and consequently allowed the bad debts under section 36(1)(viia)(a) of the Act. Such being the position, we find no error in the view. No question of law arises. Disallowance of the deduction of Amortized Government Security Premium - Held that:- Similar question came up for consideration of before this Court in COMMISSIONER OF INCOME TAX RAJKOT II VERSUS RAJKOT DIST. CO-OP BANK LTD. C/O. AD. VYAS AND CO.[2014 (3) TMI 110 - GUJARAT HIGH COURT] as held as per the directives, the assessee had to invest certain amounts in Government securities and to hold the same till maturity - In the process of acquisition, if there was any premium paid on the face value of the security, the loss had to be amortised - The instructions clearly provide for amortisation of premium paid on acquisition of securities when the same are acquired at the rate higher than the face value - Such amortisation would have to be for the remaining period of maturity - This precisely the Tribunal had directed in the order - no contrary instructions of CBDT are brought to notice - The instruction in question having been issued under section 119(2) of the Income Tax Act, 1961, would bind the Revenue – thus, there was no question of law arises – Decided against Revenue. Addition of accrued interest on advances which had become NPA - Held that:- This issue is squarely covered by the judgment of the Division Bench of this Court in case of Principal Commissioner of Income Tax v. Shri Mahila Sewa Sahakari Bank Ltd.[2016 (8) TMI 377 - GUJARAT HIGH COURT]. This question is also therefore not required to be considered.
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