TMI Blog2021 (10) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... is squarely covered in favour of the assessee by the judgment of case of Karnataka Bank Ltd. [ 2013 (7) TMI 656 - KARNATAKA HIGH COURT] wherein depreciation on investment in securities held for trading and available for sale was allowed. Being so, the CIT(Appeals) followed this judgment of the High Court. We do not find any infirmity in his order and confirm the same. This ground of the revenue is dismissed. Amortization of premium debited to profit and loss account and the amount claimed in the return of income - HELD THAT:- We find that this issue is covered by the order of this Tribunal in the case of Corporation Bank [ 2008 (12) TMI 745 - ITAT BANGALORE] in favour of the assessee. Being so, the CIT(Appeals) followed the same order of the Tribunal and hence we do not find any infirmity in the impugned order and the same is confirmed. Payment towards education fund to Karnataka State Co-operative Union, payment of annual subscription to Karnataka State Co-operative urban Federation and payment of benevolent fund to the bank's staff - HELD THAT:- There were no additions on this issue by the AO. However, the CIT(Appeals) has unilaterally considered these grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to utilize the funds instead of showing the real income and claiming permissible deductions which are below the line items and can not be deducted from the gross total income? (f) Whether on the facts and circumstances of the cases and in law, CIT(A) was right in allowing assessee's claim of payment towards education fund to Karnataka State Cooperative Union, Payment of annual subscription to Karnataka State Co-operative urban Federation and payment of benevolent fund to the bank's staff when the assessee has failed to debit these payments towards various funds in its P L account and also failed to claim the deductions in its return of income? (g) For these and other grounds that may be urged upon at the time of hearing, it is prayed that the order of CITCA) in so far as it relates to the above grounds, may be reversed and that of the Assessing Officer may be restored. (h) The appellant craves leave to alter, amend or delete any of the grounds mentioned above and / or add any new grounds on or before the hearing. 2. The first ground is with regard to disallowance u/s. 14A of the Act r.w. Rule 8D of the Income Tax Rules, 1962. The AO gave a finding that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategories shall be valued script wise and depreciation/appreciation shall be aggregated for each classification separately. The net depreciation, if any shall be provided for and net appreciation if any should be ignored. The provision required to be created on account of depreciation in any year should be debited to profit and loss account and an equivalent amount shall be transferred to Investment Depreciation Reserve Account. Accordingly, the investment will be reviewed every month and it will be valued with reference to FIMMDA valuation on Mark to Market, which is a statutory requirement as per RBI Master Circular 2003 and as per investment policy of the bank. Accordingly, the investment depreciation computed in terms of prudential norms of the Reserve Bank of India is debited to Profit and loss account and claimed as expense which is allowable under the Income Tax Act also. Reliance is placed on judgment of Hon'ble High Court in the case of Punjab and Sind Bank Vs. CIT (ITA 634/2009) and the same has been upheld by the Delhi High Court. Reliance is also placed on the judgement of Hon'ble Karnataka High Court in the case of Karnataka Bank Ltd vs ACIT (2013) 356 ITR 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining to maturity. The assessee further submitted that it had investment in Central and State Government Securities amounting to ₹ 257.93 crores as at the end the previous year which includes premium amount of ₹ 82,91,600. The investment includes held for trade amounting to ₹ 77,06,41,450 and held to maturity amounting to ₹ 1 ,80,86,84.410. The amortization of premium claimed includes ₹ 82,91,600 debited to profit and loss account pertaining to the premium amortized for AY 2013-14. Further a sum of ₹ 41,90,874 has been claimed towards 1/5th of the premium pertaining AYs 2011-12, AY 2012-13 and AY 2013-14 aggregating to 3/5th of ₹ 69,84,790. 8. In the case of the assessee, where the deduction under the head amortization of premium was disallowed for the AY 2010-11, the CIT(Appeals) vide order dt. 19.06.2013 held that the assessee is entitled for amortization of the premium paid on investment and entitled to claim the deduction spread over a period of five assessment years including the assessment year 2010-11. Accordingly, the assessee has claimed the amortization of premium equivalent to 3/5th of the premium pertaining to AY 2011-12, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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