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2012 (9) TMI 446 - DELHI HIGH COURTDisallowance of depreciation on investments - investments were held as stock in trade - Held that:- As decided in United Commercial Bank Versus Commissioner of Income-Tax [1999 (9) TMI 4 - SUPREME COURT] that for valuing the stock, it is open to the assessee can value it at the cost or market value, whichever is lower & in the balance sheet, if the securities and shares are valued at cost but from that no firm conclusion can be drawn a taxpayer is free to employ for the purpose of his trade, his own method of keeping accounts, and for that purpose, to value stock-in-trade either at cost or market price Method of accounting adopted by the taxpayer consistently and regularly cannot be discarded by the Departmental authorities on the view that he should have adopted a different method of keeping accounts or of valuation. - in favour of assessee by way of remand. Disallowance of amortization premium paid on purchase of securities - Held that:- This amortization expenses was disallowed on the ground that the securities are held as "investment" and, therefore, whenever such securities are transferred, the profit or loss arising therefrom would be computed after taking into account the cost of the acquisition. Since the issue about nature and character of securities is remanded to the AO and the outcome of this issue would depend upon the said determination, this issue also stands remanded back to the AO also. Disallowance of interest paid to sellers - expenditure was capitalized by the assessee itself - Held that:- According to assessee in fact Rs.15.61 crores was debited in PLL account and not Rs.13.52 crores and the matter can be examined by the AO in this behalf. As the respondent, during arguments, himself suggested that this can be verified by the AO for this reason, this issue is also remanded to the AO and the deduction shall be allowed subject to verification.
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