2020 (1) TMI 1685

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....d in confirming addition of Rs. 2,44,325.00 claimed as detonation or depreciation on value of Government Securities as same is Stock-in-trade and valued at cost or market price whichever is lower. 2. The Ld. Commissioner of Income-Tax (Appeals)-VI, Ahmedabad is not justified to mention in his order that assessee failed to defute the contention of Ld. Assessing Officer that Government Securities are low interest bearing. The impugned issue only entered in the Assessment order without giving Show Cause to the assessee bank. 3. The Ld. Commissioner of Income Tax (Appeals)-VI, Ahmedabad failed to consider the judgment of Commissioner of Income Tax v/s Baroda Peoples Co-Operative Bank Ltd (280 ITR 282 Gujarat) which was filed b....

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....e assessee is not acceptable in view of the fact that usually investments made to preserve SLR are low interest bearing liquid funds on which there is Nil or negligible cost value deterioration, as claimed by the assessee Therefore, the claim was rejected by the assessee. 6. Against the order of A.O, assessee preferred first statutory appeal before the ld. CIT(A) who disallowed the claim of the appellant with following observation: "It is seen that the AO observed that the appellant had debited Rs, 2,44,325/- to the Profit & Loss A/c on account of deterioration in value of Government securities. The AO held that n ... usually investments made to preserve SLR are low interest bearing liquid funds on which there is Nil or negligib....

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....n, ! hold that the AO was justified in making addition of Rs, 2,44,325/-. Accordingly, the addition of Rs. 2,44,325/- is upheld. This ground of appeal is rejected." 7. Now appellant has come before us and requested to allow the claim of the assessee. 8. We have gone through the relevant record and impugned order. Assessee is a Co.op. Bank and as per mandate assessee has to keep certain investment with itself in order to maintain Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) if any loss or deterioration is caused to the value of stock, it is charged to profit and loss account. In our considered opinion, same is allowable as deduction u/s. 37 as Govt. Securities are part of liquid assets, stock in trade. 9. We draw sup....