2018 (12) TMI 1611

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....d securities on Y.T.M. [Yield To Market Ratio] basis ? (ii) Whether the Tribunal was correct in having treated the current securities held by the Bank and sold, in the course of the assessment year as stock in trade and thus permitted the loss incurred to be deducted in computing the income of the assessee Bank for that particular year ? (iii) Whether the Tribunal was correct in having found the expenditure incurred on acquisition of new software purchased along with the computers as revenue expenditure and interfered with the disallowance of the same by the Assessing Officer as capital expenditure ?" 2. On the first question regarding the adoption of YTM Ratio, the view has been upheld by a Division Bench of this Court in Commissioner....

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.... expenditure in respect of income which does not form part of total income? (ii) Whether the Tribunal was correct in having allowed depreciation on current investments accepting the assessee's method of valuing the securities held by the assessee on the cost or market price, whichever is lower?" 5. On the first question of applicability of Section 14A of the Income Tax Act, 1961, Commissioner of Income Tax v. ESSAR Teleholdings Pvt. Ltd. [(2018) 401 ITR 445 (SC)] held that Section 14A would be applicable only from the assessment year 2007-2008. Hence the first question has to be answered in favour of the assessee and against the Revenue. 6. On the second question the Reserve Bank has directed the assessee to treat certain securities....

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....to be classified. The answer is evident in Lord Krishna Bank Ltd. [supra], which found that though classification has to be based on the population, the reference to population has to be related to a Revenue Village and not to Wards within a local authority, which would even bring in certain Wards within a municipal area also within the classification of a rural branch. Following the aforesaid dictum of another Division Bench, we have to set aside the order of the Tribunal in so far as the interference caused to the Assessing Officer's order and disallowance carried out of Rs. 1,69,63,402/- has to be upheld. The second question hence is answered in favour of the revenue and against the assessee. 9. The learned Senior Counsel draws the ....