TMI Blog2006 (2) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... Government Securities held by the applicant as investments/capital asset and not circulating capital/ stock-in-trade? 2. Whether on the facts and in the circumstances of the case the Tribunal was correct in holding that the decision of the Supreme Court in the case of Madhya Pradesh Co-op Bank Ltd. Vs. Addl. CIT and Mahdya Pradesh Rajya Sahkari Bank Maryadit Vs. CIT (218 ITR 438) and the various decisions referred to in its order for the assessment years 1985 -86 and 1986-87 would be applicable to the applicant's case? 3. Whether on the facts and in the circumstances of the case the Tribunal was justified in not following the orders of the Tribunal in the applicant's own case for the earlier years under exactly identical circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of revaluation, whether written off in the books or not the same has to be allowed. The learned counsel relied on the decision of this Court in CIT Vs. KARUR VYSYA BANK LTD., [2005] 273 ITR 510. The learned Senior standing counsel for the Department submitted that the assessee-bank held the Government Securities only as investment and therefore, they are not entitled to any relief. 4. We have given careful consideration to the submissions of both sides. It is brought to the notice of this Court that the assessee is also dealing with purchase and sale of Government Securities. The profit and loss on the sale of Government securities had been assessed as business income/loss under the Income Tax Act. The assessee bank has always been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in Madhya Pradesh Co-operative Bank Ltd. Vs. Additional Commissioner of Income-tax and Madhya Pradesh Rajya Sahkari Bank Maryadit Vs. Commissioner of Income-tax [1996] 218 ITR 438. In that case, the Bank was holding Government securities as investments and not stock-in-trade. Based on this fact, the Supreme Court came to the conclusion that the fall in the market value of the Government Securities is not an allowable deduction and hence, the same would not apply to the facts of this case. The said Supreme Court judgment was later on considered by the Supreme Court in Commissioner of Income-tax Vs. Karnataka State Cooperative Apex Bank, [2001] 251 ITR 194, wherein it was held that the said decision of the Supreme Court r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recent judgment of the Supreme Court in United Commercial Bank Vs. Commissioner of Income-tax, [1999] 240 ITR 355, wherein the Apex Court, after reiterating that the principles applicable in valuation of stock are: (1) that for valuing the closing stock, it is open to the assessee to value it at the cost or market value, whichever is lower; (2) In the balance-sheet, if the securities and shares are valued at cost, from that no firm conclusion can be drawn. A taxpayer is free to employ for the purpose of his trade, his own method of keeping accounts, and for that purpose, to value stock-in-trade either at cost or market price; (3) A method of accounting adopted by the taxpayer consistently and regularly cannot be discarded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of shares and securities at cost and if the market value was lower, it was to be shown separately in brackets. Preparation of the balance-sheet in accordance with the statutory provision would not disentitle the assessee in submitting income-tax return on the real taxable income in accordance with a method of accounting adopted by the assessee consistently and regularly. That could not 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 was no question of following two different methods for valuing its stock-in-trade (investments) because the bank was required to prepare the balance-sheet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the present occasion. But what is relevant is not the personality of the officers presiding over the Tribunal or participating in the hearing but the Tribunal as an institution. If it is to be conceded that simply because of the change in the personnel of the officers who manned the Tribunal, it is open to the new officers to come to a conclusion totally contradictory to the conclusion which had been reached by the earlier officers manning the same Tribunal on the same set of facts, it will not only shake the confidence of the public in judicial procedure as such, but it will also totally destroy such confidence. The result of this will be conclusions based on arbitrariness and whims and fancies of the individuals presiding over the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
