TMI Blog2016 (10) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that:- This matter of controversy has already been adjudicated by the Hon’ble Supreme Court in case of United Commercial Bank [1999 (9) TMI 4 - SUPREME Court] wherein this controversy has been decided in favour of the assessee against the revenue wherein held that preparation of the balance-sheet in accordance with the statutory provision would not disentitle the assessee in submitting the income-tax return on the real taxable income in accordance with the method of accounting adopted by the assessee consistently and regularly. That cannot be discarded by the departmental authorities on the ground that the assessee was maintaining the balance-sheet in the statutory form on the basis of the cost of the investments. In such cases, there is no question of following two different methods for valuing its stock-in-trade (investments) because the bank was required to prepare the balance sheet in the prescribed form and it had not option to change it. For the purpose of income-tax as stated earlier, that is to be taxed is the real income which is to be deducted on the basis of the accounting system regularly maintained by the assessee and that was done by the assessee in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has erred in levying interest u/s.234B at ₹ 14,12,268/- ₹ 64,299/- under Sec. 234C. The appellant denies the liability of payment of interest u/s.234B Sec.234C. On the facts circumstances of the case the appellant submit that levy of interest u/s.234B of ₹ 14,12,268/- and ₹ 64,299/- under Sec 234C is not justified and be deleted. 3. The revenue has also raised the following grounds:- 1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in directing the AO to compute the Long Term Capital Loss on account of sale/transfer of shares of IL FS during the year by determining cost of acquisition u/s.45(2A) of the I.T.Act, 1961 read with Circular No.768 dated 24.06.1998 of the CBDT instead of average cost method adopted by the AO whereby he disallowed long term capital loss of ₹ 7,50,92,618/- 2. The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the AO be restored. 4. The assessee filed the return of income for the A.Y.2009-10 declaring total income to the tune of ₹ 4,90,71,388/- on 29.09.2009. The return of income was processed u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred to earn the exempt income is not liable to be considered while application of the provision u/s.14A read with Rule 8D of the Act. The contention of the assessee is also that the assessee incurred only the interest expenditure which has not been claimed and deducted on account of interest u/s.14A of the Act. The assessee has filed the details at page 20 of the paper book in which he has shown the expenditure on different head. The assessment of the assessee is for the year of 2009-10. No doubt the provision u/s.14A r.w. Rule 8D of the Act is applicable. It is not in dispute that the principle laid down in case of Godrej Boyce Manufacturing Company Ltd. Vs. DCIT, 234 CTR 1 (Bom) is also applicable in this case. But while following the above said law no doubt the expenditure which has not been incurred to earn the exempt income is not liable to be considered while assessing the expenditure u/s. 14A r.w. Rule 8D of the Act. It is necessary to mentioned the detail the expenditure incurred by the assessee. 6. Assessee voluntarily disallowed the employee welfare expenses in sum of ₹ 10,709,710/- and interest expenses to the tune of ₹ 2,510,473/-. Now the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the investment as stock in trade and accordingly books of accounts were being maintained. Therefore, in the said circumstances the finding of the CIT(A) on this issue was on wrong path. Moreover, the law relied by the assessee was not seen and discussed. The details of the investment and diminution of value of shares has been furnished which lies at page 15 of the paper book. No doubt it is to be seen whether diminution of investment in the shares is liable to allowable or not. This matter of controversy has already been adjudicated by the Hon ble Supreme Court in case of United Commercial Bank reported in 240 ITR 355 wherein this controversy has been decided in favour of the assessee against the revenue. The observation of the Hon ble Supreme Court has been reproduced below:- Our view, as stated above, consistently for 30 years, the assessee was valuing the stock-in-trade at cost for the purpose of statutory balance sheet, and for the income-tax return, valuation was at cost or market value, whichever was lower. That practice was accepted by the Department and there was no justifiable reason for not accepting the same. Preparation of the balance-sheet in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2A) Where any person has had at any time during previous year any beneficial interest in any securities, then, any profits or gains arising from transfer made by the depository or participant of such beneficial interest in respect of securities shall be chargeable to income-tax as the income of the beneficial owner of the previous year in which such transfer took place and shall not be regarded as income of the depository who is deemed to be the registered owner of securities by virtue of subsection (1) of section 10 of the Depositories Act, 1996, and for the purpose of (i) section 48; and (ii) (ii) proviso to clause (42A) of section 2, the cost of acquisition and the period of holding of any securities shall be determined on the basis of the first-in-first-out method. Inserted by the Depositories, Act, 1996, w.e.f from 20.09.1995, which provides as follows: . The appellant s is contention that it has domiciled IL FS shares in two different demat accounts. In F.Y. 2008- 09, 11,54,613 shares were lying as opening stock in the demat account with DP ID 11177127 and 56,09,953 IL FS shares lying as opening stock in the demat account with DP ID 11396032 and sin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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