2014 (7) TMI 223

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....bunal. 2. Following questions of law have been raised for consideration:             " (i) Whether the findings of the Tribunal that the Government securities classified in accordance with RBI Regulations would be held to be capital asset when the appellant-bank treated the same as part of its business assets and claimed depreciation in the value of such securities in accordance with the consistent method followed by it, is contrary to law and unsustainable?             (ii) Whether the findings of the Tribunal regarding the valuation of securities is contrary to the valuation of securities done with the consistent method o....

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....on of income. It is in that regard the instant question has arisen for consideration. 6. Having noticed the contentions, the judgment of Division Bench of this Court in ITA.172/2009 dated 11.03.2013 relied on by the learned Counsel for the assessee/appellant, would be relevant for consideration and decision making on both the questions of law raised herein. Before taking notice of the said decision, the contention of the learned Counsel for the Revenue that the Tribunal has arrived at the conclusion that the RBI guidelines cannot over-ride the Income Tax Act by relying on the decision of the Hon'ble Supreme Court is to be noticed. In that regard, the Tribunal no doubt has referred to the decision of the Hon'ble Supreme Court in the ca....

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.... the authorities to disallow the said depreciation on the ground that in the balance-sheet it is shown as investment in terms of the RBI Regulations. The RBI Regulations, the Companies Act and IT Act operate altogether in different fields. The question whether the assessee is entitled to particular deduction or not will depend upon the provision of law relating thereto and not the way, in which the entries are made in the books of accounts. It is not decisive or conclusive in the matter. For the purpose of IT Act whichever method is adopted by the assessee, a true picture of the profits and gains i.e. real income is to be disclosed. For determining the real income, the entries in the balance sheet is required to be maintained in the statuto....