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2016 (2) TMI 606 - HC - Income TaxLoss on revaluation of investments - valuation of stock in trade - ITAT allowed the claim - Held that:- We find that the issue as raised before us is no more res integra. This Court had an occasion to deal with identical question in the case of Commissioner of Income Tax Vs. HDFC Bank, reported in [2014 (8) TMI 119 - BOMBAY HIGH COURT ] and held 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. Therefore, 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. Therefore, 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. If the market value is less than the cost price, in law, they are entitled to deductions and it cannot be denied by the authorities under the pretext that it is shown as investment in the balance-sheet. Thus, the view that the securities of the Banks are investment and have to be valued at costs or market price, whichever is less. - for the purposes of income tax, what has to be taxed is a real income and not necessarily the income on the basis of the manner in which the accounts are prepared. Thus, the issue is settled issue. - Decided against the revenue.
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