Case Law Details
Bank of Baroda (w.r.t E-Dena Bank) Vs PCIT (ITAT Mumbai)
Pr.CIT held that the order passed by the A.O u/s 143(3) of the Act as erroneous as well as prejudicial to the interest of the revenue on the grounds that A.O has not verified the claim of deduction of the assessee pertaining to amortization of premium on Held to Maturity investment and also not verified the claim of deduction of Rs.833.39 crores as bad debt written off from the book profit. In this regard on the issue of claim of deduction on amortization of premium Held to Maturity investment on perusal of material on record it is observed that during the course of assessment proceedings vide notice u/s 142(1) of the Act, dated 08.11.2019 as per question no. 5 of the annexure the A.O had specifically asked the assessee to submit details of amortization amount of premium paid on securities which were classified as Held to Maturity. The assessee vide submission filed on 21.11.2019 explained that it had debited the profit and loss account by Rs.62,14,64,731/- as amortization of premium on HTM investment. Even during the course of proceedings u/s 263 of the Act in response to notice issued on 02.02.2002 the assessee had submitted before the ld. Pr. CIT that assessee bank provided a detailed reply to the A.O vide letter dated 21.11.2016 as per answer no. 5 and 22 of the Annexure -2 in response to the query raised by the assessing officer. It is also noticed that the A.O had also discussed in detail the nature of HTM securities held by the assessee while making disallowance under the head broken period interest. Even the assessee has furnished 191 Kinds of HTM securities held with specific particulars i.e ID, credit card, name of security code, date of maturity, full value, book value, premium, years, amortization amount etc. The ld. Pr. CIT has not pointed out any inaccuracy in the claim of the assessee as against the RBI guidelines dated 16.10.2000 and CBDT Instruction No. 17 of 2008 dated 16.01.2008 on the issue of allowability of deduction on amortization of premium on HTM securities.
All these detailed facts and material were brought to the knowledge of the Pr. CIT during the course of proceedings u/s 263 of the Act, however, the Pr. CIT(A) had not controverted these facts and material to substantiate his findings. In view of the above facts and circumstances and after taking into consideration the judicial pronouncements relied upon, we find that the decision of the ld. Pr.CIT for treating the assessment order as erroneous as well as prejudicial to the interest of the revenue is not justified. Therefore, we set aside the order passed u/s 363 of the Act. Accordingly, the appeal of the assessee is allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal filed by the assessee is directed against the order passed by the ld. Pr. CIT-2, Mumbai which in turn arises from the order passed by the A.O u/s 143(3) of the Income Tax Act, 1961, for A.Y. 2017-18. The assessee has raised the following grounds before us:
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