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2012 (9) TMI 974 - AT - Income TaxDisallowance of loss on revaluation of the securities - when the taxpayer valued the securities on the basis of the realizable value could it be allowed as loss in the absence of the copies of the balance-sheet of the respective company? - Held that:- The RBI issued guidelines to value to unsecured shares on the basis of YTM, i.e. yield to maturity method adopted for valuation of securities. The Kerala High Court has also found that YTM rates have been put out by the PDAI / FIMMDA at periodical intervals. Therefore, when the taxpayer revalued the asset on the basis of the guideline issued by the RBI at realizable value i.e. YTM method suggested by RBI, the taxing authority cannot find fault with taxpayer. As observed by Kerala High Court, the assessing authority has not come out with any suggestion / formula for computation of market value of unquoted shares. It is also not the case of the revenue that the guideline issued by the RBI for valuation is irrational. In these facts and circumstances, this Tribunal is of the considered opinion that the law laid down by the jurisdictional High Court in the cases of Nedungadi Bank Ltd (2002 (11) TMI 29 - KERALA High Court) and Lord Krishna Bank Ltd (2010 (10) TMI 860 - Kerala High Court) is applicable in the case of the present tax payer also. Directed to allow the notional loss claimed by the taxpayer on revaluation of the securities as deduction while computing the total income.
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