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2020 (5) TMI 483 - AT - Income TaxLoss of revaluation of investment on the HTM category - assessee has claimed losses on account of amortization of premium paid at the time of purchase of securities held under the category of HTM - HELD THAT:- We find that the issue is fully covered by the earlier orders right for assessment years [2019 (1) TMI 689 - ITAT DELHI], [2018 (12) TMI 50 - ITAT DELHI]. The learned CIT(A) has only followed the principle laid down by the Hon’ble Apex Court in the case of UCO Bank [1999 (9) TMI 4 - SUPREME COURT]. In the light of the aforesaid binding decision of the Hon’ble Apex Court, we do not find any infirmity in the order of CIT(A). In the absence of any material change, as confirmed by both the parties, we hereby delete the addition made by the revenue. Depreciation/loss on investments and on MTM on derivatives - HELD THAT:- We are of the considered opinion that the loss arising on shifting of securities from AFS/HFT categories to HTM category and depreciation is allowable. Appeal of the revenue in this ground is dismissed. Contribution made by PNB employees pension trust - HELD THAT:- As decided in own case [2019 (1) TMI 689 - ITAT DELHI] held that similar expenses were allowed in earlier years in the assessments made under section 143 (3) of the Act and the decision of Delhi ITAT in the case of DCIT verses Ranbaxy laboratories Ltd [2009 (6) TMI 126 - ITAT DELHI-I] wherein the allowability of expenses towards provision for Pension Fund were held to be allowable expenses and section 43B has no application, is applicable. The fact that the assessee had actually contributed/paid the amount to pension fund makes the case of the assessee even stronger. Expenses claimed u/s 36(1)(viii) - HELD THAT:- CIT(A), however, held that inasmuch as the ld. AO was not satisfied with the method followed by the assessee bank that they had not correctly calculated the deduction under section 36(1)(viii) of the Act and the Ld. AO was of the view that the assessee bank had claimed profit attributable to eligible business and computed the same on proportionate basis, based on the total fund deployed method, Ld. CIT(A) directed the assessee to furnish the correct computation of eligible deduction under section 36(1)(viii) of the Act before the Ld. AO within 30 days and the AO shall verify the same to grant deduction - we hereby refrain from interfering with the order of the ld. CIT (A). Depreciation on goodwill - HELD THAT:- As decided in own case [2019 (1) TMI 689 - ITAT DELHI] since, the merging of Nedungadi Bank in the financial year 2002-03, the depreciation on the goodwill of the Nedungadi Bank has been consistently allowed subsequent to the merger for last many years. The AO may examine the computation part of depreciation on the goodwill from the year of merger and allow the claim of the assessee. Disallowance under Rule 8D(2) sec 14A - HELD THAT:- Present assessee before us is also a Bank, where shares were held as stock-in-trade and therefore it becomes business activity of assessee. In our opinion specific observation Hon’ble Supreme Court in the case of Maxopp Investment vs CIT [2018 (3) TMI 805 - SUPREME COURT] reproduced hereinabove are squarely applicable to facts of present case. Respectfully following the view taken by Hon’ble Supreme Court in the case of Maxopp Investment vs CIT (supra), we allow this ground raised by assessee and hold that these were not investments made by assessee in order to fall within the ambit of Rule 8D (iii) of Income tax Rules 1963.” Addition on account of Leave Encashment - HELD THAT:- After referring to the decision in the case of Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT] and in the case of Exide Industries Ltd. Vs Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] the constitutional bench of the Hon’ble Supreme Court vide order dated 24.04.2020 has upheld the constitutional validity of Clause (f) of Section 43B of the Income Tax Act. Hence, were hereby confirm the disallowance made by the revenue. Assessee appeal allowed.
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