2021 (4) TMI 477

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....red in deleting the disallowance of broken period interest on purchase of securities by holding this expenditure deductible as business expenditure ignoring the judgment in the case of Commissioner of Income Tax Vs Bank of Rajasthan Ltd. (2009) 316 ITR 391, which decided the issue in favour of the Revenue.?" [Tax Effect : Rs. 1,76,98,253] 2. "Whether on the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in treating the Govt Securities held by the bank as Stock in Trade and allowing the deprecation in the case of such securities despite the fact that the said securities were classified under the head "investment" by the assessee itself in its accounts?" [Tax Effect: Rs. 1,04,59,646] 3. The issues raised in this a....

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....on'ble Madras High Court in the case of CIT vs. Karur Vaisya Bank Ltd. (2010) 33 DTR Madras 244. 6. At the outset, the Ld. Counsel of the assessee submitted that the issue involved of broken period interest has been adjudicated by the co-ordinate bench of the Tribunal in assessee's own case in its favour and therefore by following the said decision of the co-ordinate bench of the Tribunal, the appeal of the Revenue may kindly be dismissed on this ground. 7. The Ld. D.R., on the other hand, relied on the order of AO. 8. After hearing both the parties and perusing the material on record including the decision cited in ITA No. 676/Chennai/2014 A.Y. 1996-97, we observe that the identical issue was decided in assessee's own cas....

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....I circulars issued from time to time. Thus, as per the provisions of Banking Regulation Act, 1949 read with Circulars issued by the RBI, though, the securities are held by the Banks as stock-in-trade, however, as per the prescribed norms of Banking Regulation Act, 1949 and RBI guidelines, the assessee has to prepare Balance Sheet and Profit & Loss account in a particular format as per which the securities held as stock-in-trade are to be shown as investment. Though, the Assessing Officer has not disputed the aforesaid factual position, however, he has held that the Income Tax Act, 1961 will get precedence over the Banking Regulation Act, 1949. Thus, from the aforesaid facts it is clear, though, the assessee has held the securities as stock-....

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....following the decision of Hon'ble Madras High Court in the case of CIT vs. Karur Vaisya Bank Ltd. (supra). 12. The ld. AR, at the outset, submitted that the issue is squarely covered in assessee's own case by the decision of co-ordinate bench of the Tribunal in ITA No. 676/Chennai/2014 wherein it was held that depreciation on valuation of securities has to be allowed to the assessee. 13. The Ld. D.R. relied on the orders of authorities below. 14. We have heard the rival submissions of both the parties and perused the material on record including the decision of co-ordinate bench of the Tribunal in assessee's own case in ITA No. 676/Chennai/2014 and observed that identical issue has been decided in favour of the assessee. T....