2012 (7) TMI 329

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....in I.T.A. No. 1406/Mds/99 and I.T.A. No. 631/Mds/2000, this Tribunal had recalled the latter orders for the impugned assessment years, for the limited purpose of deciding the issues relating to fall in market value of securities, loss on sale of Government securities and lease rent of safety lockers, which were omitted to be considered. 2. Assessment year 1995-96 is taken up first for disposal. Two issues are involved for this assessment year. One is disallowance of lease charges of Rs. 6,00,795/- and the other is claim for fall in market value of securities Rs. 3,61,25,550/-, which disallowances were confirmed by the CIT(Appeals). 3. When the matter came up before us, learned A.R. submitted that the Tribunal in its original order dat....

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....action was arranged for tax avoidance. The CIT(A) after examining the factual situation found that if the lease and sale transaction arrangement was not made, the assessee would have been entitled to depreciation at the rate of 25% on Rs.67,50,000/- which works out to Rs.16,87,500/-. Because of lease back transaction, the assessee has claimed only Rs.7,51,950/-. Therefore, the CIT(A) found that the assessee has not gained or saved anything because of lease and sale back transaction. If the assessee, in our opinion, wanted to avoid payment of tax, it would have continued to own the safety lockers and claimed depreciation to the extent of Rs.16,87,500/-. The very fact that the assessee is claiming an expenditure of Rs.7,51,950/- towards quart....

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....he issue in favour of the assessee. Likewise, for the Assessment Years 1988-89 and 1992-93 in I.T.A. Nos. 552(Mds)/92 and 379(Mds)/96, this Tribunal held that on the basis of the value of the investment at the close of the accounting period, depreciation is allowable in the hands of the assessee. It is also brought to our notice that the Apex Court in the case of United Commercial Bank v. CIT (1999) (240 ITR 355) considered similar issue and it was held that the assessee can value the investment either at cost or market value whichever is lower for valuing its stock-in-trade (investment) for income tax purposes. In view of the above factual aspect, in our opinion, the CIT(A) has rightly allowed the claim of the assessee. We do not find any ....