TMI Blog2016 (2) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. - Income Tax Appeal No. 1977 of 2013 - - - Dated:- 8-2-2016 - M. S. Sanklecha And B. P. Colabawalla, JJ. For the Appellant : Mr. A.R. Malhotra a/w N.A. Kazi For the Respondent : Ms. Usha Srivastav i/b Consulta Juris ORDER P. C. 1. This appeal under Section 260A of the Income Tax Act, 1961 (the Act) taking exception to the order dated 18th January, 2013 of the Income Tax Appellate Tribunal (Tribunal) for Assessment Year 2007-08 has already been admitted on 1st December, 2015 in respect of question nos. 4, 5 and 7 while question nos. 1, 2 and 3 were dismissed. However, question no.6 as formulated by the Revenue in its memo of appeal could not be dealt with on 1st December, 2015 for the following reasons as recorded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis that such an observation was made. Mr.Malhotra also points out that the above observations were made, without having looked into the papers and only while considering the request of the respondent for an adjournment. (f) We wish to note that it may not be correct for the counsel to elevate the status of our parole observations, during the course of hearing, to that of orders and to communicate such observations to their clients, thereby creating an impression that such observations are conclusions or orders made by the Court. In this case, observations, if any, were admittedly at the stage when the case papers were no before us and only motion for adjournment was being considered. (g) At one stage, we were inclined to adjourn this question for consideration at the final hearing of the appeal. However on further thought it appears to us that it may not be advisable, as it would only create uncertainty. We would have adjourned the hearing of the appeal to another date but this bench has been constituted only for today. Thus after having spent over half an hour on the other questions, we are disposing of all the above questions mentioned but as Mr. Malhotra is not read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m time to time. In the circumstances, the set off on account of appreciation in some other securities being allowed, an amount of ₹ 359 Crores claimed as a loss, was disallowed. Thus added to the income of the Respondent-Assessee. 4. In appeal, the Commissioner of Income Tax (Appeals) by order dated 30th June, 2010 reversed the order of the Assessing Officer, inter alia, by placing reliance upon the following decisions: (a) Apex Court in United Commercial Bank v/s. CIT 240 ITR 355 (d) Decision of this Court in CIT Vs. Bank of Baroda, 262 ITR 334 and (c) The order of Tribunal in Respondent-Assessee's own case for earlier year. It further holds that computation of income under the Act is not to be accordance with Reserve Bank of India Circulars/ Guidelines in the absence of specific provisions in the Act. In this behalf, attention was drawn to Sections 43(D) and 36(1)(viia) of the Act, mandating computation keeping in view the guidelines of the Reserve Bank of India. 5. Being aggrieved, the Revenue carried the issue in appeal to the Tribunal. By the impugned order, the Tribunal dismissed the Revenue's appeal, holding that the issue stands covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td, (supra) were quoted with approval as under: From the aforesaid judgments of the apex court, now it is clear that a method of accounting adopted by the taxpayer consistently and regularly cannot be discarded by the Departmental authorities on the view that he should have adopted a different method of keeping the accounts or on valuation. Financial institutions like bank, are expected to maintain accounts in terms of the RBI Act and its regulations. The form in which, accounts have to be maintained is prescribed under the aforesaid legislation. Therefore, the account had to be in conformity with the said requirements. The RBI Act or the Companies Act do not deal with the permissible deductions or exclusion under the Income Tax Act. For the purpose of the Income Tax Act, if the Assessee has consistently been treating the value of investment for more than two decades the investments as stock-in-trade and claimed depreciation, it is not open to the authorities to disallow the said depreciation on the ground that in the balance-sheet it is shown as investment in terms of the RBI Regulations. The RBI Regulations, the Companies Act and the Income Tax Act operate altogether in diff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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