TMI Blog2017 (10) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... of securities from the category ‘Available for Sale’ to ‘Held to Maturity’ is an allowable deduction, we find merit in the contention of the assessee/appellant. Since, the loss in question is allowable, the Ld. CIT has no jurisdiction to exercise the powers under section 263 of the Act. We, accordingly, set aside the impugned order passed by the Ld. CIT u/s 263 of the Act as bad in law - Decided in favour of assessee. - ITA No. 3028/MUM/2015 - - - Dated:- 31-5-2017 - SHRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) For The Appellant : Shri K.K. Ved (AR) For The Respondent : Ms. Anupama Singla (DR) ORDER PER RAM LAL NEGI, JM The assessee has preferred the present appeal against the order dated 24/03/2015 pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delines of the Reserve Bank of India, therefore, the loss is allowable. However, the Ld. CIT rejecting the contention of the assessee passed the impugned order and issued directions to the AO to frame the assessment order afresh taking into account the observations made in the said order. 4. Aggrieved by the order of Ld. CIT, the assessee preferred this appeal before us on the following effective grounds:- 1:0 Re: Validity of Order u/s. 263: 1:1 The Commissioner of Income-tax has erred in holding that the Order dated 12 November 2012 passed by the Assessing Officer u/s 143(3) of the Income-tax Act, 1961 was passed without application of mind and was erroneous and prejudicial to the interest of revenue and in setting aside t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 68 ITR 377 (Bom) and the identical issue has been decided by the Hon ble Court in favour of the assessee. Hence, the impugned order is liable to be set aside. 6. On the other hand, the Ld. Departmental Representative (DR) relying on the impugned order passed by the Ld. CIT submitted that since the assessee had wrongly debited the amount of ₹ 4,68,65,000/- the Ld. CIT has rightly held that the loss is notional and the same is not allowable. 7. We have heard the rival submissions and also gone through the material placed on record. We notice that in CIT Vs. HDFC Bank (supra), the Hon ble Bombay High Court has held that the claim of the assessee for the loss on transfer of securities from the category Available for Sale to Held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue and decided the issue in favour of the assessee. The relevant portions of the judgment of the Hon ble Bombay High Court in the aforesaid case are reproduced below: 6. Being aggrieved by the order passed by the Appellant under section 263 of the Act, the assessee Bank filed an Appeal before the ITAT, Mumbai Bench. After hearing the representatives of the Assessee as well as the Revenue, the ITAT held that even though the Assessee had challenged the order of the Appellant passed invoking the said powers were not satisfied, the ITAT allowed the Appeal of the Assessee on merits and without going into the jurisdictional issue. We find that the ITAT, after examining the entire factual matrix of the matter and after relying upon its ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in the present case is identical to the case discussed above and since, the Hon ble Bombay High Court has decided the identical issue in favour of the assessee in the said case, by confirming the findings of the ITAT that the claim of the assessee for loss on the transfer of securities from the category Available for Sale to Held to Maturity is an allowable deduction, we find merit in the contention of the assessee/appellant. Since, the loss in question is allowable, the Ld. CIT has no jurisdiction to exercise the powers under section 263 of the Act. We, accordingly, set aside the impugned order passed by the Ld. CIT u/s 263 of the Act as bad in law and allow ground No 1.1 to 1.3. 11. In so far as ground No 2.1 2.2 are concern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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