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2023 (1) TMI 243 - HC - Income TaxUnrealized gains on revaluation of forward contracts - bank accounts were admittedly prepared on accrual basis and revenue was recognized following mercantile method except for certain items which were accounted on cash basis? - Whether Tribunal is right in law in setting aside claim of assessee relating to unrealized gains on revaluation of forward contracts when assessing authority rightly denied the same by holding that as the bank accounts were admittedly prepared on accrual basis and revenue was recognized by following mercantile method except for certain items which were accounted on cash basis? - HELD THAT:- Issue decided in favour of assessee as relying on [2022 (9) TMI 1406 - KARNATAKA HIGH COURT] Value of investment in HTM Securities - Whether Tribunal is right in law in setting aside disallowances on account of AFS and HFT category of investments? - HELD THAT:- Issue decided in favour of assessee [2020 (11) TMI 1087 - KARNATAKA HIGH COURT] Disallowances u/s 36(1) - as submitted that the word used in the statute is aggregate average advances "made" by the rural branches - HELD THAT:- The manner in which the computation has been made has been given in the case of Vijaya Bank Case[2018 (1) TMI 1575 - ITAT BANGALORE] Order passed by the Tribunal in Canara Bank's case [2017 (11) TMI 1425 - ITAT BANGALORE] followed in Vijaya Bank case has attained finality and the Revenue has not challenged the said order. Further, the High Court of Calcutta, while considering an identical situation as recorded thus, "Mr. Khaitan, learned senior Advocate appeared on behalf of the assessee and submitted that the computation to be made as prescribed by Rule 6ABA is for the purpose of fixing the limit of the deduction available under section 36(1)(viia). Clauses (a) and (b) in Rule 6ABA cannot be given the restricted interpretation. The amounts of advances as outstanding at the last day of each month would be a fluctuating figure depending on the outstanding as increased or reduced respectively by advances made and repayments received. The assessee might provided for bad and doubtful debts but the deduction would only be allowed at the percentage of aggregate average advance, computation of which is prescribed by Rule 6ABA. We find from the amended direction made by the Tribunal that such direction is in terms of Rule 6ABA. The ITO has made the computation of aggregate monthly advances taking loans and advances made during only the previous year relevant to assessment year 2009-10 as confirmed by CIT(A). The Tribunal amended such direction, in our view, correctly applying the rule." These appeals with regard to question No.4 must fail and it is also answered in favour of the assessee . Disallowance u/s 14A - whether conditions for invoking said provisions as fully satisfied in the case of the assessee? - HELD THAT:- Issue answered in favour of the assessee and against the Revenue in the decision of Supreme Court of India in South Indian Bank Ltd[2021 (9) TMI 566 - SUPREME COURT]
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