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TMI Blog2014 (7) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in terms of the RBI Act and its regulations - the assessee has maintained the accounts in terms of the RBI Regulations and he has shown it as investment - But consistently for more than two decades it has been shown as stock-in- trade and depreciation is claimed and allowed. Notwithstanding that in the balance sheet, it is shown as investment, for the purpose of Income-Tax Act, it is shown as stock-in-trade - the value of the stocks being closely connected with the stock market, at the end of the financial year, while valuing the assets, necessarily the Bank has to take into consideration the market value of the shares – Decided in favour of Assessee. - ITA.5004/2011 & ITA.5005/2011 - - - Dated:- 12-3-2014 - MR. A. S. BOPANNA AND M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to market fluctuations. Since the appellant had followed the RBI guidelines and had assessed the securities held for maturity and claimed depreciation, the deduction claimed was not allowed. The contention of the Revenue is that the depreciation and deduction would be allowed only if securities are held for trading and not held for maturity. The practice being followed by the appellant in respect of stocks held for maturity is also to assess the same at the end of the year keeping in view the fluctuations in the markets, and thereafter to assess the same. 5. The contention on behalf of the Revenue is that in view of the provisions contained in Section 145A(a) (i) of the Income Tax Act, the procedure followed by the appellant Co-op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax vs. ING Vysya Bank Ltd., in ITA No.2886/2005 disposed of on 6.6.2012 and has ultimately concluded as follows: 8. From the aforesaid judgments of the Apex Court, now it is clear that the method of accounting adopted by the tax payer consistently and regularly cannot be discarded by the Departmental authorities on the view that he should have adopted a different method of keeping the accounts or on valuation. Financial institutions like Bank, are expected to maintain accounts in terms of the RBI Act and its regulations. The form in which, accounts have to be maintained is prescribed under the aforesaid legislation. Therefore, the account had to be inconformity with the said requirements. RBI Act or Companies Act do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach of the authorities in this regard is contrary to the well settled legal position as declared by the Apex Court. 9. In the instant case, the assessee has maintained the accounts in terms of the RBI Regulations and he has shown it as investment. But consistently for more than two decades it has been shown as stock-in- trade and depreciation is claimed and allowed. Therefore, notwithstanding that in the balance sheet, it is shown as investment, for the purpose of Income-Tax Act, it is shown as stock-in-trade. Therefore, the value of the stocks being closely connected with the stock market, at the end of the financial year, while valuing the assets, necessarily the Bank has to take into consideration the market value of the shares. If ..... X X X X Extracts X X X X X X X X Extracts X X X X
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