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TMI Blog2017 (5) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... ard together and are being disposed of by this consolidated order for the sake of convenience. ITA No2358Ahd2012 AY 200910 2. The solitary ground of appeal raised by the Assessee reads as under:- The Ld.CIT(A) has erred in law and on facts in upholding disallowance made by Ld.A.O. of Rs. 37,08,022/- incurred by appellant on devaluation of investment in Govt.Securities. 3. Briefly stated, assessee is engaged in the business of banking activity. The return of income of the assessee for the AY 2009-10 was subjected to scrutiny assessment. In the course of assessment, the Assessing Officer (AO) observed that the assessee has debited an amount of Rs. 37,08,022/- under the head 'mark to market loss on government security'. It was explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Held for Trading (HFT)'; 'Available for Sale' (AFS) and 'Held for Maturity (HTM)'. It was submitted that the assessee being a bank is required to prepare its balance-sheet as per the provisions of the Banking Regulation Act. The balance-sheet format is thus prescribed wherein there is specific Head 'investment' where the aforesaid securities was held are reflected. The notified format does not provide for bifurcation between the securities so held between the 'investment' and 'stock-in-trade'. It was thus contended that the Revenue has misdirected itself in law in denying the claim towards diminution loss in disregard of true purport of fact situation. 7. The Ld.DR, on the other hand, relied upon the orders of the authorities below and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBDT Circular No.665 dated 5.10.1993 have been elaborately discussed in the order of CIT(A) and relevant extract of the same have been reproduced above in our order. As per RBI guidelines securities purchased by the primary urban co-op, banks can be classified under three heads - i) Held to Maturity (HTM) ii) Available for Sale (AFS) iii) Held for Trading (HFT) The loss incurred by the assessee of Rs. 3,39,79,600/- is from sale of securities held for "Available for Sale (AFS) and the detailed working of the same has been provided by the Id. AR of the assessee in the Paper Book. These securities which are available for sale which are held by the assessee as per the RBI guidelines to keep apart some of the assets in the specified mode a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /49 taxmann.com 335, United Commercial Bank vs. CIT (1999) 240 ITR 355/106 Taxman 601 (SO. Investment Ltd, vs. CIT (1970) 77 ITR 533 (SO and CIT vs. Bank of Baroda (2003) 262 ITR 334/129 Taxman 716 (Bom). Respectfully following the decision of Hon'ble Supreme Court and Hon'ble Bombay High Court and considering the classification of security so made and the loss arose on account of revaluation of securities are required to be allowed. Accordingly, we set aside the order of both the lower authorities and matter is restored back to the file of AO for deciding afresh in the light of our above observation. We direct accordingly." Asst. Year 2008-09 We, therefore, on the basis of our examination of facts visa- vis RBI guidelines and abo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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