2018 (2) TMI 1808 - HC - Income Tax

Investments made by the bank in security as stock in trade - whether Tribunal is right in law in confirming the order of CIT (Appeal) in treating the securities held by the assessee under the category of held to maturity as held in the nature of stock in trade? - Held that - Substantial questions of law against the revenue and in favour of the assessee.

Summary

Issues:
Challenging order of Income Tax Appellate Tribunal regarding assessment year 2009-10 on substantial questions of law.

Analysis:
The appeal was filed challenging the order of the Income Tax Appellate Tribunal, Bengaluru Bench, regarding the assessment year 2009-10. The substantial questions of law raised in this case included whether the Tribunal was correct in dismissing the department's appeal related to investments made by the bank in security as stock in trade. Additionally, the issue of reliance on Circular No.599, which had been withdrawn by the Central Board of Direct Taxes, was also questioned. Furthermore, the Tribunal's decision on treating securities held by the assessee under the category of "held to maturity" as stock in trade was disputed.

The learned counsel for both parties acknowledged that the issue in question was previously addressed by the Court in a prior decision dated 14.12.2015. In that decision, the Court relied on earlier matters and answered the substantial questions of law against the revenue and in favor of the assessee. Consequently, based on the precedent set by the previous decision, the current appeal was dismissed, with the substantial questions of law being answered against the revenue and in favor of the assessee.