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2014 (7) TMI 223 - HC - Income TaxNature of Government Securities – Capital asset or Business asset – valuation of securities – consistent method of accounting - claiming depreciation due to market fluctuations - Held that:- Following Commissioner of Income Tax vs. ING Vysya Bank Ltd. [2013 (6) TMI 43 - KARNATAKA HIGH COURT] - the method of accounting adopted by the tax payer consistently and regularly cannot be discarded by the Departmental authorities on the view that he should have adopted a different method of keeping the accounts or on valuation - Financial institutions like Bank, are expected to maintain accounts in terms of the RBI Act and its regulations - the assessee has maintained the accounts in terms of the RBI Regulations and he has shown it as investment - But consistently for more than two decades it has been shown as stock-in- trade and depreciation is claimed and allowed. Notwithstanding that in the balance sheet, it is shown as investment, for the purpose of Income-Tax Act, it is shown as stock-in-trade - the value of the stocks being closely connected with the stock market, at the end of the financial year, while valuing the assets, necessarily the Bank has to take into consideration the market value of the shares – Decided in favour of Assessee.
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