TaxTMI 
TaxTMI 
2014 (8) TMI 1215
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.... 'Act'). 2. The assessee is a bank. On 30.10.2004, it had filed its return admitting income of Rs. 144,70,73,949/- under normal provisions and Rs. 705,95,96,000/- as book profits u/s 115JB of the Act. The same was 'summarily' processed. The assessee had claimed deduction of Rs. 72.75 crores as losses arising out of non-recoverable investments being stock-in-trade written off debited to provision for depreciation on investments. The Assessing Officer framed a 'regular' assessment on 28.12.2006 making various disallowances/additions. He did not disallow the deduction claim of non-recoverable investments and computed total taxable income at Rs. 966,83,10,306/-. 3. Thereafter, the Assessing Officer reopened the 'regular' assessment and is....
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....penses. In the reassessment order, the income originally assessed was adopted. Subsequently, on examination of record, it is noted that the assessee claimed deduction in the Income computation statement of Rs. 72.75 crores being loss arising out of nonrecoverable investments. The said loss of Rs. 72.75 crores is arrived as under: Unit Trust of India - US 64 Rs. 39.48 crores Shares Rs. 4.87 crores IOB Properties Pte Ltd., Singapore Rs. 28.40 crores Rs. 72.75 crores M/s IOB Properties Pte Ltd.. Singapore is a subsidiary of the assessee company. The depreciation on the value of investments were claimed on the ground that the shares held in this company constitutes stock-in-trade. However, it is noted that t....
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....crores in the income computation statement which was allowed in the original assessment order dated 28.12.2006 as well as in the re-assessment order dated 28.12.2011. In both the stages adequate examination was not carried out as to the eligibility of the claim and as to the complete information on the occurrence of such loss leading to the claim. In the case of the subsidiary viz. IOB Properties Pte. Ltd, Singapore there was amalgamation during the Previous Year relevant to the A.Y. 2004-05. It was not brought on record as to whether the loss computed was on account of revaluation arising out of amalgamation process 'or there were independent events leading to the claim. Also there is no finding as to the treatment of gain on HTM inves....
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....as to the correctness of the claim as loss on securities held as stock-intrade. In the year of amalgamation gain or loss relatable to amalgamation on transfer of assets are exempted / ignored (Section 47 transaction not recorded as transfer). These crucial aspects were not examined whether the loss claimed was arising 011 account of amalgamation or in the normal course of business. Without examining these vital aspect the deduction allowed on the basis of the claim solely relying on the methodology adopted by the bank is not in accordance with the provisions of the Act and has constituted substantial error causing prejudice to the revenue. It is trite law that omission to make proper inquiries on the part of the AO constituted an error with....