TaxTMI 
TaxTMI 
2017 (10) TMI 477
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....on to the AO to frame the assessment order afresh taking into account the observations made in the said order. 2. Brief facts leading to the present appeal are that the assessee a Co-operative Bank engaged in the business of banking, filed its return of income for the A.Y. 2010-11 declaring the total income of Rs. 4,65,17,921/-. The assessment was completed u/s 143 (3) of the Act accepting the returned income. 3. Later on the Ld. CIT noticed that the assessee had debited an amount of Rs. 4,68,65,000/- on account of loss on shifting of securities from the category 'Available for Sale' to the category 'Held to Maturity'. The Ld. CIT accordingly issued show cause notice u/s 263 of the Act observing that the loss has arisen to the assesse....
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....of the revenue and hence the setting aside of the same by the Commissioner of Income-tax u/s 263 of the Income-tax Act, 1961 is erroneous and bad in law. 1:3 The Appellant submits that the impugned Order passed u/s 263 of the Income Tax Act, 1961 by the Commissioner of Income-tax be struck down. Without prejudice to the aforesaid: 2:0 Re: Treating the loss of Rs. 4,68,65,000/- as a notional loss. 2:1 The Commissioner of Income-tax has erred in holding that the loss of Rs. 4,68,65,000/- debited by the Appellant to its Profit and Loss Account for the year is a notional loss which cannot be allowed and in directing the Assessing Officer to redo the assessment afresh. 2:2 The Appellant submits that c....
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....nsideration the submissions made by the assessee. Subsequently, it was noticed that the assessee had debited to the profit & loss account a sum of Rs. 87.11 lacs as a loss on account of transfer of securities from category 'Available for Sale' to 'Held to Maturity' which was allowed by the Assessing Officer. The Ld. CIT set aside the assessment order invoking jurisdiction u/s 263 of the Act holding that the allowance of such a notional loss was erroneous and prejudicial to the interest of the revenue. The assessee challenged the said order before the ITAT, Mumbai Bench. The co-ordinate Bench of ITAT set aside the revisional order holding that the claim of the assessee for the loss on transfer of securities from the category 'Available for S....
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....a Bank Ltd. (supra), held that the claim of the Assessee for the loss of Rs. 87.11 lakhs on the transfer of securities from the category "Available for Sale" to "Held to Maturity" was an allowable deduction, and therefore set aside the order passed by the Appellant under section 263 of the Act....." "7. After perusing the order passed by the Appellant dated 23rd March 2009 and the impugned order passed by the ITAT, we find that the ITAT was fully justified in setting aside the order of the Appellant dated 23rd March 2009 and allowing the deduction of Rs. 87.11 lakhs to the Assessee. In this regard, the reliance placed by Mr. Mistry, the learned senior Counsel appearing on behalf of the Respondent-Assessee on the judgment of this Co....