2014 (8) TMI 389

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..... able deduction in the computation of the profits - The tribunal had rightly following the decision Commissioner of Income Tax Vs. The Nedungadi Bank Ltd. [2002 (11) TMI 29 - KERALA High Court] was of the view that the securities so retained should be and have to be treated as stock-in-trade of the assessee - reduction in market price of the securities held as stock in trade has to be taken on reco .....

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..... is apparent from the assessment order that the assessee had retained securities in terms and as per Reserve Bank of India s mandate. The respondent-Bank was required to value the securities on cost price or market value, whichever was lower as per the guidelines issued by RBI. The assessment order itself records that the securities were retained by the assessee to maintain Statutory Liquidity Rat .....

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..... foresaid decision of the Kerala High Court, which had examined the issue in question in great detail. The said judgment refers to the securities retained by the bank to maintain SLR as per the RBI guidelines. It was held that the securities so retained should be and have to be treated as stock-in-trade of the assessee. The Kerala High Court followed their earlier judgment in Commissioner of Income .....

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