GST Help   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
GST - Acts SGST - Acts GST - FAQ GST Rates, Exemption CGST Notif. IGST Notif. Exempt Income Salary income
Extracts
Home List
← Previous Next →

2017 (5) TMI 838 - ITAT AHMEDABAD

2017 (5) TMI 838 - ITAT AHMEDABAD - TMI - Disallowance of provision for depreciation in value of government securities as per RBI guidelines - Held that:- We find that the aforesaid issue is squarely covered in favour of assessee in its own case for AY 2007-08 and AY 2009-10 as held depreciation in value was allowable even if specific instructions of the board were not there. Circular and instruction of the CBDT being squarely applicable on facts of assessee’s case, so CIT(A) was justified in al .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of Southern Technologies Ltd.(2010 (1) TMI 5 - SUPREME COURT OF INDIA ) has clearly observed that by way of special provision under s.36(1)(viia), the banks are allowed to claim deduction subject to a ceiling or a limit. As per section 36(1)(viia), the banks are entitled to claim deduction certain prescribed percentages of the average advance made by the rural branches of such banks. However, relevant facts about the advance by the rural branch requires to be verified in the light of section 36 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Shinde, Sr.DR ORDER PER PRADIP KUMAR KEDIA, AM: The captioned appeal by the Assessee is directed against the order of the Commissioner of Income Tax(Appeals)-Gandhinagar, [CIT(A) in short] dated 06/09/2013 for the Assessment Year (AY) 2009-10. 2. The grounds of appeal raised by the Assessee read as under:- 1. The order passed by the learned CIT(A) is bad in law and contrary to the provisions of law & facts. 2. The learned CIT(A) erred in law as well as on facts in confirming the disallowance .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ness loss u/s.28 r.w.s.37 of the Act. It is submitted that it be so held now. 2.3. The learned CIT(A) as well as AO erred in disregarding Instructions and Circulars issued by CBDT for assessment of banks in making above disallowances. 3. The learned CIT(A) erred in law as well as on facts in confirming the disallowance made by AO with respect to premium amortization expenses on government securities as per guidelines of RBI for a sum of ₹ 4,57,920/-. 4. The learned CIT(A) as well as AO err .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

alue is allowable as business expenditure/business loss under s.28 r.w.s.37 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). We find that the aforesaid issue is squarely covered in favour of assessee in its own case for AY 2007-08 in ITA No.1026/Ahd/2011 order dated 13/03/2005 and AY 2009-10 in ITA No.369/Ahd/2013 order dated 19/10/2016. The relevant para of the order of the Tribunal in ITA No.1026/Ahd/2011 (supra) is reproduced hereunder for ready reference:- 5. Aft .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

banking assets (stock in trade) has to be shown in the balance sheet as investment. Further, banks are showing gain or loss arises from sale of security as business income/loss rather than capital gain. The above position has also been clarified by Circular no. 665 dated 05-10-1993. "The question whether a particular item of investment in securities constitutes stock-in-trade or a capital asset is a question of fact In fact, the banks are generally governed by the instructions of the Reser .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nks vide its Instruction No. 17/2008 dated 26.11,2008 (F. No. 228/3/3008 - ITA-III). Point no. VII of the said instruction, which has been discussed above. The accounts had been maintained and shown as per RBI guidelines. The depreciation of assets has been claimed on securities which had been classified as Available for Sale (AFS). As per the board's circular, the depreciation is to be aggregated scrip wise and net depreciation, if any, is required to be provided for in the accounts. Same i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

"available for sale' category of securities has correctly been claimed. So, claim of assessee is allowable as per circular and instruction. Similar claim of depreciation and value of Government securities was made and allowed in earlier assessment year. In such circumstances, same method of accounting has been followed and disallowed from year to year. Such claim has been allowed by various judicial pronouncements. Hon'ble Mumbai High court in case of CIT vs Bank of Baroda (2003) 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he board were not there. Circular and instruction of the CBDT being squarely applicable on facts of assessee s case, so CIT(A) was justified in allowing the same which needs no interference from our side. We uphold the same. 5. We see no reasons to depart with the view already taken by the Tribunal. 6. Ground No.2 of assessee s appeal is allowed. 7. Ground No.3 relates to premium amortization expenses on Government securities. As pointed out by the Ld.AR for the assessee, we find that the issue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is provision is meant to be for the bad debts components of the standard assets. It was claimed that though the provision for bad debt is not expressly allowed as per Income Tax Act, but as per section 36(1)(viia) banks are allowed to claim provision of bad and doubtful debts subject to 7.5% of the Gross total income and 10% of average rural advances. In this case, the assessee bank while computing the total income added back provision of ₹ 1,50,000/- and claimed as deduction under s.36(1) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version