High Court Allows Depreciation on Investment Portfolio Valuation The High Court allowed depreciation on the valuation of the investment portfolio, treating the investments as stock-in-trade, following a precedent set in ...
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High Court Allows Depreciation on Investment Portfolio Valuation
The High Court allowed depreciation on the valuation of the investment portfolio, treating the investments as stock-in-trade, following a precedent set in a previous case. The Court ruled in favor of the assessee, citing consistency with earlier decisions. The Court also determined that the Tribunal's order was not perverse, as it aligned with the judgment in a related case, leading to the dismissal of the writ petition.
Issues: 1. Depreciation on valuation of investment portfolio as stock-in-trade. 2. Tribunal's order being considered as perverse due to following decisions not reaching finality.
Depreciation on valuation of investment portfolio as stock-in-trade: The High Court admitted the appeal to consider whether depreciation on the valuation of the investment portfolio is allowable by treating the investments held by the assessee bank as stock-in-trade post the RBI Master Circular in conjunction with CBDT Circular No.665. The Court noted that the substantial questions of law were previously addressed in the case of CIT v. Corporation Bank, where the same questions were resolved in favor of the assessee and against the revenue. Consequently, the Court decided to follow the precedent set by the aforementioned judgment and ruled in favor of the assessee, allowing depreciation on the valuation of the investment portfolio.
Tribunal's order being considered as perverse: The second substantial question of law pertained to whether the Tribunal's order could be deemed as perverse for relying on decisions that had not reached finality. Both counsels agreed that the questions were covered by the judgment in CIT v. Corporation Bank, where the issues were resolved in favor of the assessee. The Court, therefore, concluded that the Tribunal's order was not perverse, as it was consistent with the decisions in the aforementioned case. Consequently, the Court disposed of the writ petition in line with the precedent established in the earlier judgment.
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