Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2012 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (12) TMI 418 - MADRAS HIGH COURTBroken period interest on securities - banking business - The assessee claimed the loss on the difference of interest received and paid on the ground that the securities in which the assessee was investing constituted part of its stock-in-trade in the banking business. - held that:- The interest in respect of current securities, which are held in stock-in-trade has to be allowed as the revenue expenditure based on the Bombay High Court decision in the case of American Express Bank Vs. Commissioner of Income Tax [2002 (9) TMI 96 - BOMBAY HIGH COURT]. - After citing the decision in Vijaya Bank Ltd's case [1990 (9) TMI 5 - SUPREME COURT], distinguishing the case of the assessee on the securities held as stock-in-trade, the Bombay High Court pointed out that the decision in Vijaya Bank [1990 (9) TMI 5 - SUPREME COURT] would have no application to the case, where securities were held as trading assets and interest income were assessed as business income under Section 28 of the Act. - No substance in remanding the matter once again back to the Assessing Officer for the self same exercise. Valuation of investments and stock-in-trade - held that:- securities held as stock-in-trade and investment being stock in trade are to be treated on par and to be valued either at the cost or market price, whichever is lower. In the circumstances, keeping in the background the decision in the case of UCO Bank Vs. CIT [1999 (9) TMI 4 - SUPREME COURT], we direct the Assessing Officer to redo the valuation in respect of stock-in-trade at cost or market value, whichever is lower. Disallowance on the payment of additional interest on deposits made by Public Sector Undertakings - held that:- the assessee is entitled to succeed on its claim for deduction under Section 37 of the Act and the view of the Income Tax Appellate Tribunal that payment of additional interest on Fixed Deposits by PSUs as contrary to public policy cannot be sustained.
|