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2015 (1) TMI 61 - AT - Income TaxDeletion of addition of investment – whether the notional loss said to be suffered by the taxpayer on revaluation of the securities is allowable as deduction or not - Held that:- As decided in assessee’s own case for the earlier assessment year, wherein the decision in Commissioner of Income-tax vs. Nedungadi Bank Ltd. [2002 (11) TMI 29 - KERALA High Court] wherein it has been held that the bank constitute their stock in trade or investment - the loss claimed by the bank in valuation of their securities should be allowed as deduction in computing the taxable profit - the loss suffered by the taxpayer in revaluation of the securities has to be allowed as deduction - 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 assessing authority has not come out with any suggestion/formula for computation of market value of unquoted shares – thus, the order of the CIT(A) is upheld – Decided against revenue. Deletion of addition on appreciation on current category of investment – Held that:- As decided in assessee’s own case for the earlier assessment year, wherein it has been held that the investment in the unquoted shares is to be treated as a part of its stock-in-trade and, accordingly, valued at cost or market value, whichever is less - the AO's objection with regard to the non-availability of the market quotation, the shares being unquoted, as also qua non write off of the relevant investment in books, the same being liable for a valuation, as stock-in-trade, on each valuation date, would not hold - however, the fact that the balance-sheets were uncommunicable or the companies were defunct, which only would enable the valuation at nil as against break-up value, the assessee claiming loss for the entire book value, would need to be established by it – thus, there was no infirmity in the order – Decided against revenue. Addition u/s 36(1)(viia) - Deduction of provision for bad debts - Held that:- Following the decision in Commissioner of Income Tax Versus Lord Krishna Bank Ltd. [2010 (10) TMI 860 - Kerala High Court] - the definition clause does not exclude the literal meaning of rural branch which necessarily excludes urban areas - if the assessee's case accepted by the Tribunal that population in a Ward has to be reckoned for deciding as to whether the location of a Panchayat is in a rural area or not is accepted, then probably even in Municipal areas there may be Wards with less than 10000 population thereby answering the branch located in such Municipal area also as a rural Branch - going by the ordinary meaning of Rural Branch, we feel only Branches of the Bank located in rural areas are covered - decided against assessee. Disallowance of provision of leave encashment – Held that:- As decided in assessee’s own case for the earlier assessment year, wherein it has been held that the opinion of the CIT(A) was set aside so far as disallowance claimed in respect of leave encashment u/s 43B(f) of the Act, as on today - as long as Section 43B(f) is on Statute, the disallowance is justified – Decided against assessee. Disallowance of payment of pension u/s 37 – Held that:- As decided in assessee’s own case for the earlier assessment year, wherein it has been held that the assessee has claimed that the amount received from the Pension Fund is credited in the Profit & Loss Account and the amount of pension given to its retired employees is debited to the Profit & Loss Account - the tax authorities have not examined the present claim of the assessee that there is no duplication in this regard - the claim of the assessee needs re-examination at the end of the AO – Decided in favour of assessee.
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