Allowability of premium paid in excess of face value of investments under HTM category

Premium paid in excess of the face value of the security held under ‘Held to Maturity’ (‘HTM’) category which has been amortised over the period remaining till maturity is allowable – rules Mumbai Tax Tribunal

Facts

• The Assessee had a unit at Bhopal which was not functioning since the assessment year 1997-98.

• The Bank of Rajasthan Ltd (‘the assessee’) was a company engaged in the business of banking.

• The assessee had filed its Return of Income claiming loss on valuation of investments which included an amount towards amortization of premium paid for securities held under ‘Held to Maturity’ (HTM) category.

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