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TMI Blog2019 (12) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to our notice that the quantum addition in respect of claim of depreciation on fall in value of investment has been deleted by the Tribunal and claim of expenditure on software has been allowed by the Hon'ble High Court of Delhi. The ld. counsel for the assessee furnished copies of orders of the co-ordinate bench and the Hon'ble High Court of Delhi. 4. The ld. DR fairly conceded. 5. We have given thoughtful consideration to the orders of the authorities below and have carefully perused the orders of the coordinate bench and that of the Hon'ble High Court of Delhi. We find force in the contention of the ld. counsel for the assessee. 6. In so far as the first issue is concerned, the Tribunal in quantum appeal in ITA Nos. 6795 and 6796/DEL/2013 has held as under: "4. We have heard the submissions of both the parties and have gone through the entire material available on record. A perusal of the impugned order reveals that while deciding this issue against the assessee, the ld. CIT(A) has relied on earlier order of first appellate authority in appeal of the assessee for A.Y. 2007-08. However, the said order of first appellate authority has been 7 ITA No.6795 & 6796/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of the Karnataka High Court in the case of Karnataka Bank Ltd. (supra), reliance on which was placed by Mr Mistry, squarely covers the issue raised in this Appeal. The facts in the case before the Karnataka High Court were that the Assessee was holding securities in different categories as mandated by the RBI Master Circular dated 1st September 2003. The Assessee treated such securities as stock-in-trade and 8 ITA No.6795 & 6796/D/13 and 242 & 243/D/14 claimed depreciation on the book value after valuing the securities at cost or market value whichever was lower. The Revenue refused to accept the Assessee's plea for the deduction and disallowed the same and added back to the total income the said amount. Aggrieved by the said order, the Assessee preferred an Appeal before the CIT (Appeals). The same was dismissed upholding the contention of the Assessing Authority. Aggrieved thereby, the Assessee preferred an Appeal to the Tribunal. The Tribunal inter alia held that since the securities on which the depreciation had been claimed on the earlier years had not been identified, the issue was restored to the file of the Assessing Officer for consideration afresh and part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction. Therefore, the approach of the authorities in this regard is contrary to the well settled legal position as declared by the apex court. 9 ITA No.6795 & 6796/D/13 and 242 & 243/D/14 In the instant case, the assessee has maintained the accounts in terms of the RBI Regulations and he has shown it as investment. But consistently for more than two decades it has been shown as stock-in-trade and depreciation is claimed and allowed. Therefore, notwithstanding that in the balance-sheet , it is shown as investment, for the purpose of Income Tax Act, it is shown as stock-in-trade. Therefore, the value of the stocks being closely connected with the stock market, at the end of the financial year, while valuing the assets, necessarily the bank has to take into consideration the market value of the shares. If the market value is less than the cost price, in law, they are entitled to deductions and it cannot be denied by the authorities under the pretext that it is shown as investment in the balance-sheet." (emphasis supplied) 11. We therefore find that the issue raised in this Appeal is also squarely covered by the judgment of the Karnataka High Court in the case of Karnataka Bank Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r decision of High Court of Karnataka in Commissioner of. Income Tax v. ING VYSYA Bank Ltd. [2013] 356 ITR 532 (Kar.) where, in the facts of that case it was held that where the Assessee invested in securities for the purpose of complying with RBI instructions, such investments could not be termed as investment in the form of security ready for sale. The Court is not persuaded to concur with the view expressed in ING VYSYA Bank Ltd. (supra) which appears to have been decided in the peculiar facts of that case. The Court prefers to adopt the reasoning in the decision the Karnataka High Court in Karnataka Bank Ltd. (supra) and the Bombay High Court in HDFC Bank Ltd. (supra). The Court accordingly declines to frame a- question on this issue." Therefore, respectfully following the above decisions of coordinate Bench and of Hon'ble Jurisdictional High Court, we decide this issue in favour of the assessee by deleting the additions of Rs. 209.99 crores and Rs. 119.55 crores respectively for A.Yrs. 2008-09 and 2009-10. Accordingly, grounds Nos. 1 to 4 in both the appeals of the assessee are allowed 7. In so far as the second issue is concerned, though the Tribunal has dismissed the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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