PRINCIPAL COMMISSIONER OF INCOME TAX 1 vs. KALUPUR COMMERCIAL CO. OP. BANK LTD.

C/TAXAP/1340/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1340 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 1 Versus KALUPUR COMMERCIAL CO. OP. BANK LTD. ========================================================== Appearance: MR M.R. BHATT SR. ADVOCATE WITH MS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE DR.JUSTICE A. P. THAKER

Date : 08/01/2019

ORAL ORDER (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. By   this   appeal   under   section   260A   of   the Income­tax Act, 1961 (hereinafter referred to as the “Act”), the appellant­revenue has challenged the order dated 21.05.2018 passed by the Income Tax   Appellate   Tribunal,   Ahmedabad   Bench ‘A’(hereinafter referred to as the“Tribunal”) in ITA No.2124/Ahd/2016 by proposing the following question, stated to be a substantial question of law; “Whether   on the  facts  and  circumstances  of the   case,   the   Appellate   Tribunal   was justified  in  deleting  the  addition  made  by the   AO   on   the   issue   of   disallowance   of Amortized

Premium

amounting

to Page 1 of 4

C/TAXAP/1340/2018 ORDER Rs.2,10,11,715/­? “ 2. In this case, the assessee filed its return of   income   for   assessment   year   2012­13   on 20.09.2012

declaring

total

income

of Rs.69,51,17,191/­. Assessment came to be framed under   section   143(3)   of   the   Act   on   27.03.2015 inter   alia   making   an   addition   on   account   of amortized   premium   of   Rs.2,10,11,715/­.   The assessee carried the matter in appeal before the Commissioner (Appeals), who deleted the addition by   relying   upon   an   earlier   decision   of   the Commissioner (Appeals) in the assessee’s own case for   assessment   year   2011­12   as   the   facts   were identical to that case. Before the Commissioner (Appeals),   the   assessee   had   relied   upon   the decision of the Tribunal in case of DCIT v. Surat National   Co­operative   Bank   Ltd.   in   ITA No.2793/Ahd/2012   for   assessment   year   2009­10 wherein, it was held that as per CBDT, New Delhi Instruction   No.17   of   2008   dated   26.11.2008, investments of banks classified under HTM (Held to   Maturity)   category   need   not   be   marked   to market and are carried at acquisition cost unless these   are   more   than   the   face   value,   in   which case, the premium should be amortized over the period remaining to maturity. 3. The  revenue  challenged  the  order   passed  by Page 2 of 4

C/TAXAP/1340/2018 ORDER Commissioner   by   way   of   an   appeal   before   the Tribunal,   which   came   to   be   dismissed   by   the impugned order. 4. Mr.   M.R.   Bhatt,   Senior   Advocate,   learned counsel for the appellant, reiterated the grounds set out in the memorandum of appeal. 5. It   is   an   admitted   position   that   the controversy involved in the present case is no longer  res integra  as the same stands concluded by a decision of this High Court in the case of Commissioner of Income­tax, Rajkot­II v. Rajkot District Co­operative Bank Ltd. and hence, it is not   necessary   to   set   out   the   facts   and contentions in detail. 6. In the above decision, this court has held thus: "7. 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   impugned order.   Though   contended,   no   contrary instructions   of   CBDT   are   brought   to   our notice.   The   instruction   in   question   having been   issued   under   section   119(2)   of   the Income­tax   Act,   1961,   would   bind   the Revenue.   No   question   of   law,   therefore, Page 3 of 4

C/TAXAP/1340/2018 ORDER arises.” 7. For the reasons recorded by this court in its judgment   and   order   passed   in   the   case   of Commissioner of Income­tax, Rajkot­II v. Rajkot District   Co­operative   Bank   Ltd.   (supra),   no question of law can be stated to arise out of the impugned   order   passed   by   the   Tribunal.   The appeal,   therefore,   fails   and   is,   accordingly, summarily dismissed. (HARSHA DEVANI, J) (A. P. THAKER, J) PRAVIN KARUNAN Page 4 of 4