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2013 (12) TMI 70 - ITAT HYDERABADDepreciation on securities held to maturity - Held that:- Following assessee's own case for the A.Y. 2003-04 - Main business of the banking company being to accept deposits to advance loans to appropriate persons, money constitutes its stock in trade - The amount required to kept in India as per section 24 of the Banking Regulation Act, 1949 in the form of cash, gold and unencumbered securities is part of stock in trade of the assessee - When there is no distinction between the three categories of securities viz.,HTM, AFS and HFT. The assessee can provide for depreciation in all the securities on the same footing - Decided against Revenue. Broken period interest - Held that:- Following assessee's own case for the A.Y. 2008-09 and CIT Vs. Nedungadi Bank [2002 (11) TMI 29 - KERALA High Court] - The bank purchased government securities paid towards interest in respect of securities purchased for the broken period from the preceding due date for payment of interest upto the date of purchase - Broken period from the preceding due date for payment of interest upto the date of the sale. The assessee claimed the amount of interest paid for the broken period upto the date of purchase as deduction on the ground that the securities were held stock in trade - The broken period interest is an allowable deduction - Decided against Revenue. Disallowance u/s 14A - Held that:- Rule 8D is applicable from A.Y. 2008-09 - After intrduction of this rule in the Income tax Rules - Disallowance of expenditure relating to earning of exempted income under section 14A of the Act, has to be determined as per the method provided under Rule 8D - The assessee itself during the proceeding before the CIT(A) has worked out the disallowance to be made in terms with Rule 8D(2) which has been accepted by the CIT(A) - Decided against assessee. Provision for bad and doubtful debts - Held that:- Following assessee's own case for assessment years 2007-2008 and 2008-09 and T.R.F. LTD. Versus COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT] - Any debt written off as irrecoverable should be allowed as deduction - If the provision fro bad debts debited to the P&L is netted against the current assets the provisions is an allowable deduction even if individual accounts of the debtors are not wtitten off - As per circulars issued by the CBDT - The deduction on account of provision for bad and doubtful debts u/s 36(1)(viia) is distinct and independent of s. 36(1)(vii) relating to allowance of bad debts - The issue is restored for fresh decision.
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