9911796707
TMI Blog2010 (10) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... unquoted Government securities, it is the rational basis which assessee was bound to adopt. The Assessing Officer also has not come out with any formula for computation of market value of unquoted securities and he has no case that the RBI guidelines for valuation is irrational. Thus Tribunal rightly upheld assessee's claim for valuation of unquoted Government securities based on RBI guidelines. Deduction of provision for bad debts in terms of Section 36(1)(viia) - basis of classifying Branches of the Bank as Rural Branches and other Branches – Held that:- Basic unit as available for identification of rural area in the Census Report can be legitimately adopted. So much so, the above meaning of rural area contained in the Census Report wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he three questions raised, one question relates to the deduction of loss allowed by the Tribunal on account of embezzlement that happened in one of the Branches of the respondent-Bank. We notice that the Tribunal has allowed it on the respondent establishing with evidence the actual loss on account of embezzlement that happened in one of it's Branches. We do not find any substantial question of law arising from the order of the Tribunal on their finding on this issue. However, we proceed to consider the remaining two questions which are substantial questions of law. 3. The first question raised pertains to valuation of unquoted Government securities. Since securities involved are not quoted in the market, market price is not known. Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body issuing guidelines to the Banks for valuation of unquoted Government securities, we feel it is the rational basis which assessee was bound to adopt. The Assessing Officer also has not come out with any formula for computation of market value of unquoted securities and he has no case that the RBI guidelines for valuation is irrational. So much so, we feel the Tribunal rightly upheld assessee's claim for valuation of unquoted Government securities based on RBI guidelines. We, therefore, dismiss the Revenue's appeal on this issue. 4. Next question raised pertains to assessee's claim for deduction of provision for bad debts in terms of Section 36(1)(viia) of the Income Tax Act. Here the only question raised is as to basis of classifying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever taken as the residual portion excluding the urban area and for that no strict definition is followed." 5. In our view, the definition clause does not exclude the literal meaning of rural branch which necessarily excludes urban areas. If the assessee's case accepted by the Tribunal that population in a Ward has to be reckoned for deciding as to whether the location of a Panchayat is in a rural area or not is accepted, then probably even in Municipal areas there may be Wards with less than 10000 population thereby answering the branch located in such Municipal area also as a rural Branch. Going by the ordinary meaning of Rural Branch, we feel only Branches of the Bank located in rural areas are covered. When the Legislature adopts pop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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