TMI Blog2020 (1) TMI 1685X X X X Extracts X X X X X X X X Extracts X X X X ..... ed opinion, same is allowable as deduction u/s. 37 as Govt. Securities are part of liquid assets, stock in trade. We draw support from a case in the matter of Pr. CIT, Patiala vs. State Bank of Patiala [ 2017 (2) TMI 125 - PUNJAB AND HARYANA HIGH COURT] where in similar facts and circumstances, relief was granted to the assessee. Law is well settled that the Securities held by the Bank are in the nature of stock-in-trade. In view of the above, we direct A.O. to deleted addition as claimed by the assessee. Appeal filed by the Assessee is allowed. - SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER For the Appellant : None For the Respondent : Shri Mudit Nagpal, Sr. D.R. ORDER PER MAHAVIR PRASAD, JUDICIAL M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arket price whichever is lower , same principle applies for govt. securities by banking company. 4. Assessee submitted that depreciation on Govt. Security is not the depreciation as contemplated in section 32 of the Act. Depreciation on Government security is the systematic allocation of deterioration in the value of security (investment) over its useful life. Government security, in respect of which alleged depreciation is claimed as deduction by the assessee bank, is the instrument floated by the Government of India in which every bank is required to invest its liquidity. As per provisions of section 18 25 of the Banking Regulation Act, 1949, bank shall be under an obligation to maintain certain reserve ratios popularly known as Cash Rese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is stock in trade like any commercial unit where the value of closing stock is made at cost or market price whichever is lower. Same principle applies to govt. security by banking company. It is seen that firstly the AO has nowhere said that the amount of Rs. 2,44,325/- is depreciation u/s 32 of the Act. Hence, on this account submission of the appellant is wrong. Secondly, it is seen that the submission of the appellant is very general in nature. The appellant has not given any concrete details in support of its contention. Also, the appellant has not given details to refute contention of the AO that such securities are low interest bearing and hence there is negligible deterioration in cost. No facts have been provided in terms of what we ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
