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2015 (12) TMI 295 - AT - Income TaxAddition on account of business loss of security including premium written off treating it as a long term capital loss - CIT(A) deleted the addition - Held that:- Assessee has sold government securities and met net loss of ₹ 3,28,78,600/- after adjustment of profit of ₹ 5,35,800/- and premium on purchase of securities of ₹ 11,01,000/- total amounting to ₹ 3,39,79,600/-. As per RBI guidelines securities purchased by the primary urban co-op. banks can be classified under three heads - i) Held to Maturity (HTM), ii) Available for Sale (AFS) and iii) Held for Trading (HFT) The loss incurred by the assessee of ₹ 3,39,79,600/- is from sale of securities held for “Available for Sale (AFS) and the detailed working of the same has been provided by the ld. AR of the assessee in the Paper Book. These securities which are available for sale which are held by the assessee as per the RBI guidelines to keep apart some of the assets in the specified mode at certain percentage which are inter alia known as CLR and SLR and the profit/loss on sale of such securities (AFS) cannot be treated as capital gain/loss. As decided in Yes Bank Ltd. vs. Dy.CIT [2015 (1) TMI 1012 - ITAT MUMBAI ] Decision of the Hon'ble Bombay High Court in the case of CIT v. HDFC Bank (2014 (7) TMI 724 - BOMBAY HIGH COURT) and that of the Bangalore bench of the Tribunal in the case of State Bank of Mysore (2009 (5) TMI 610 - ITAT BANGALORE) are in support of assessee’s claim of provision for re-valuation in respect of securities transferred from HTM to AFS category should be allowed as a deduction. - Decided in favour of assessee.
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