TaxTMI 
TaxTMI 
2015 (10) TMI 929
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....re summarized as under:- "On the facts and in the circumstances of the case and in law the ld. CIT(A)-II, Jaipur has erred in:- (i) deleting the addition of Rs. 40,39,47,845/- for A.Y. 1997-98, Rs. 52,28,27,254/- for A.Y. 1998-99, Rs. 43,28,21,506/- for A.Y. 1999-2000 and Rs. 19,24,87,907/- for A.Y. 2000-01 respectively on account of valuation of closing stock of securities. (ii) deleting the disallowance of Rs. 1,21,131/- for A.Y. 1997-98, Rs. 1,12,227/- for A.Y. 1998-99, Rs. 2,51,819/- for A.Y. 1999-2000 and Rs. 87,740/- for A.Y. 2000-01 respectively made on account of expenses claimed to have been paid to various ....
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....cepted the changed method of valuation and deleted the addition. Against this deletion, the department sought permission from COD to pursue this issue before the Hon'ble ITAT. This was not allowed and consequently ITAT dismissed the appeal filed by the department for want of the COD permission. In the year under consideration, the AO by following the global basis of valuation as against the scrip-wise method of valuation of securities made an addition of Rs. 40,39,47,845/- as per the discussion on page 10-12 of the order. In making such addition he adopted the value of opening stock as per the assessee which was on scrip basis, instead of substituting it by the global basis. 3.3 The ld. CIT(A) deleted the addition by following observat....
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.... of valuation is rightly deleted by ld CIT(A). The ld. AR relied on the order of the Hon'ble Uttarakhand High Court in the case of CIT vs. Nainital Bank Ltd., 309 ITR 335 in which it has been held that RBI guidelines is binding on the bank and therefore, the valuation of investment on the basis of RBI guidelines is justified. The ld. AR further submitted that the AO in each year under appeal has accepted the valuation of the opening stock of shares and securities on scripwise basis but has changed the valuation of closing stock of shares and securities on global basis. This has resulted in double addition. In fact the assessee debit the depreciation in the valuation of stock of shares and securities in the profit and loss account by mak....
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....The relevant paragraph regarding valuation of investment is as under:- 3. Investment Standards for Investments "The investment portfolio of a bank would normally consist of both 'approved securities' (predominantly Govt. securities) and 'others' (shares, debentures and bonds), It has been decided that the investments in approved security bifurcated into 'permanent' and 'current investments. Permanent investments are those which banks intend to hold till maturity and current investments are those which banks intend to deal in i.e. buy and sell on a day-to-day basis. On this basis, banks shoul....
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....d Banks will have attracted adversity with RBI guidelines. The Scheduled Banks cannot refuse to implement such directions. Therefore, the change in pattern of valuation in respect of impugned securities is bona fide. The Hon'ble Uttarakhand High Court in the case of CIT vs. Nainital Bank Ltd., 309 ITR 335 (Uttrakhand) has upheld the judgment of Tribunal holding that the assessee being a banking company, the RBI guidelines were binding on it and therefore, valuation of investment on the basis of RBI guidelines was justified. While holding so, the ITAT Delhi Bench judgment in the case of Tedco Investment & Financial Services (P) Ltd. vs. DCIT 87 (2003) ITD 298 (Del.) was taken into consideration and it was affirmed by the Hon'ble Uttr....