TMI Blog2013 (8) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... hik dated 12-03-2012 for the A.Y. 2009-10. The issue in controversy is whether the Ld. CIT(A) was justified allowing the claim of the assessee of ₹ 50,24,000/- in respect of depreciation on the securities claimed by the assessee bank. 2. The briefly stated facts are as under. The assessee is a Cooperative Bank functioning at Shahada, a backward place in Nandurbar district. The assessee bank has filed return of income declaring total income of ₹ 34,14,49,955/- for the A.Y. 2009-10. But subsequently revised the said return by declaring the total loss of ₹ 1,33,473/-. So far as the issue of depreciation on the securities of ₹ 50,24,000/- is concerned, the Assessing Officer has noted that the assessee has claimed dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. In the case of The Sangli Bank Ltd (supra) the issue of allowability of the loss towards diminution in the value of securities, classified as Held Till Maturity (HTM) has been considered by the ITAT, Pune. The operative part of the findings of the Tribunal order is as under: 4. We find that the assessee has classified the securities in the three categories (a) Held till Maturity (HTM), (b) Available for sale (AFS) and (c) Held for trading (HFT). The Assessing Officer was of the opinion that the loss on diminution of the value of the securities cannot be charged to the profit and loss account in the case of securities held under the category of HTM. We find that the assessee bank has followed the RBI guidelines and as per the RBI gui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Less : Diminution in value in closing (viii) stock 945.00 Net Rs. 1796.37 6. We find that the reservation of Ld. CIT(A) is that there is the deferment of the revenue than actual loss of revenue. We do not agree with the opinion of Ld. CIT(A). Admittedly the said method is consistently followed by the bank in the preceding years and the same has been accepted without raising any question. If at this juncture we go with the stand of the revenue then that will distort the entire picture. Admittedly whatever the expenditure is amortized the same is added back when the securities are sold. Another aspect we are to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised return has been discarded. In the return the assessee has claimed the loss on revaluation of the securities to the extent of ₹ 19,11,97,856/- that was relating to the investment held under the category Held to Maturity (HTM) and ₹ 26,927/- on re-valuation of investment held under Available for Sale (AFS). Now the law is well settled by the different judicial pronouncement that all the securities held by the bank in the compliance with the guidelines issued the RBI under the Banking Regulation Act are the part of stock-in-trade only. In the present case, it is consistently stated by the assessee bank that the securities held under AFS and HTM are as per the statutory liquidated ratio (SLR). The assessee s case is squarely co ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
