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2019 (1) TMI 690 - AT - Income TaxNature of payment - Business expenditure or appropriation of funds - claim for deduction being the contribution to Co-operative Education Fund - National Co-operative Union of India - Held that:- As decided in assessee’s own for AY 2010-11 [2015 (1) TMI 485 - ITAT HYDERABAD] the amount contributed by assessee to the National cooperative Union, New Delhi, is appropriation from the net profits. There is a right to receive the income independent of accrual and receipt of income by the assessee before third party could lay claim to any part of it. Since income reached assessee before it reached third party, there is no diversion. As already stated, there is no payment in the year of losses. Therefore, payment u/s 63(1)(b) is only an appropriation of profit. Moreover, this amount paid during the year is also not out of the profits of their year but profits of earlier year. Therefore, on that count also amount cannot be allowed as deduction during the year. For these reasons, we uphold the order of the authorities and reject assessee’s grounds on the issue. Disallowance of an amount towards depreciation of HTM Securities - Held that:- In assessee’s own case for AY 2006-07, deleted the disallowance made on account HTM securities depreciation It is stated that marking to market the entire portfolio eliminates the incentive for imprudent financial decision. It is also stated that it would encourage trading in securities held in hitherto classified "permanent" category. The objection of making a market in long-term debt will thus be achieved if all the securities without any differentiation are marked to market. Thus, it can be seen that even the securities winch are held in permanent are supposed to be dealt is to trade in the securities and hence undoubtedly, they are the stock-in-trade for the assessee, when we hold that there is no distinction between the three categories of securities, obviously the assessee can provide for depreciation in all the securities on the same footing. Accordingly, the disallowance is deleted
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