TMI Blog2019 (2) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... ble opportunity of hearing to the assessee. Before parting with the matter, we would like to clarify on an issue concerned with the change in the method of valuation of securities. On a specific query, AR submitted that the assessee was earlier valuing such securities as per a method prescribed by the RBI, resulting into some loss to be amortized over certain number of coming years. Once we have held that the new method of valuation has to be followed, which would account for loss on decline in the market value of securities in the concerned year itself, there can be no rationale in continuing to allow losses in subsequent years under the old method of valuation of securities as per RBI, which admittedly resulted into amortization of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss on valuation of securities. The said disallowance being bad in law, patently illegal, arbitrary, perverse and devoid of merits the same may please be deleted and the claim of the appellant bank may please be accepted. 3. Briefly stated, the facts of the case are that the assessee filed its return declaring total income of ₹ 14.68 crore and odd which was subsequently revised to Nil income. The Assessing Officer (AO) observed that the assessee had made adjustment of ₹ 97,57,794/- in the revised return on account of valuation of securities. It was noticed by the AO that the loss so claimed was not accounted for in the books of account. Since the assessee adopted a different method of valuation of securities for income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon ble High Court. When the matter came before the Hon ble Supreme Court, their Lordships observed that if an assessee under some misapprehension or mistake fails to make an entry in the books of account and although, under the law, a deduction must be allowed by the ITO , the assessee will not be debarred from such deduction. It was further held that whether the assessee is entitled to a particular deduction or not will depend on the provision of law relating thereto and not on the view which the assessee might take of his rights nor can the existence or absence of entries in the books of account be decisive or conclusive in the matter . It is, therefore, palpable from the ratio decidendi laid down in this case that record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f valuation has been changed from one recognized method to another recognized method, then such a change cannot be rejected if it is consistently followed. Nothing has been brought on record to demonstrate that the new method of valuation was not consistently followed by the assessee. Ergo, we do not see any embargo in the assessee switching over to the new method of valuation of securities, Cost of market price, whichever is less . 6. Now comes to quantum of the amount of loss claimed by the assessee under the new method of valuation of securities. It is seen from the assessment order that the AO has made an addition of ₹ 97.57 lakh on account of Adjustment on valuation . Even the ground raised by the assessee, as reproduced abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation has to be followed, which would account for loss on decline in the market value of securities in the concerned year itself, there can be no rationale in continuing to allow losses in subsequent years under the old method of valuation of securities as per RBI, which admittedly resulted into amortization of loss in some subsequent years. The AO is directed to examine this aspect also, which is connected with the determination of loss on valuation of securities under the new method of Cost or market price, whichever is less. It should be ensured that the assessee does not get double deduction. 8. Factual matrix for the A.Y. 2012-13 is mutatis mutandis similar to that of the preceding year except for the amount of disallowance of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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