Tribunal allows depreciation on HTM investments, upholds treatment as stock-in-trade

The Tribunal dismissed the Revenue's appeals, affirming the CIT(A)'s decision to allow depreciation on HTM investments for assessment years 2010-2011 and 2011-2012. The Tribunal upheld the assessee's treatment of HTM securities as stock-in-trade, in line with RBI guidelines and previous Tribunal orders, rejecting the Revenue's reliance on a High Court judgment.

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Issues: Appeal against disallowance of depreciation on HTM category investments for assessment years 2010-2011 and 2011-2012.

Analysis:
1. Common Issue Raised in Appeals: The appeals by the Revenue challenge the orders of the CIT(A) for assessment years 2010-2011 and 2011-2012 regarding the disallowance of depreciation on HTM category investments.

2. Factual Background: The assessee, a banking company, faced disallowance of depreciation on HTM investments totaling significant amounts for both assessment years. The CIT(A) decided in favor of the assessee based on previous Tribunal orders in the assessee's own case for earlier assessment years.

3. Arguments by Revenue and Assessee: The Revenue relied on a judgment of the Karnataka High Court, while the assessee argued that the issue was settled in their favor by Tribunal orders not overturned by the High Court.

4. Tribunal's Decision: The Tribunal noted the assessee's consistent treatment of HTM securities as stock-in-trade for valuation purposes, in line with RBI guidelines. Relying on previous Tribunal orders and the judgment of the High Court, the Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeals.

5. Conclusion: The Tribunal dismissed the Revenue's appeals, affirming the CIT(A)'s decision to allow depreciation on HTM investments, citing consistency with previous Tribunal orders and the absence of any High Court judgments overturning those orders.

This detailed analysis outlines the key legal issues, factual background, arguments presented by both parties, the Tribunal's reasoning, and the final decision in the judgment.

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