2025 (9) TMI 1011

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....The ld. CIT(A) has erred in law by holding profit on sale of shares of CARE Ltd. as Long Term Capital Gain (LTCG) in the hands of the assessee. 2. The ld. CIT(A) has erred in by passing the decision of the Hon'ble Supreme Court of in the case of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. (2007) 160 Taxman 48/289 ITR 6 (SC), where the apex court has held that investment made by a banking concern are part of the business of banking. 3. The ld. CIT(A) has erred in by passing the Circular No.18 of 2015 dated 2.11.2015 issued by the Central Board of Direct Taxes ratifying the direction of the Hon'ble Supreme Court in the case of CIT Vs. Nawanshahar Central Co-operative Bank ltd. 3. Brief facts of the case are that the....

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....he Hon'ble Supreme Court in the case of Commissioner of Income Tax, Jalandhar v. Nawanshahar central cooperative Bank Ltd reported in (2007) 289 ITR 6 as well as another judgment of the Apex Court in the case of Bank of Rajasthan Ltd v. Commissioner of Income Tax. Further ld. DR also relied upon the circular No. 4/2007 dated 15-06-2007. Lastly the ld. DR submitted that it is well settled that in banking business, securities purchase by the banks, per se constitute stock in trade of the bank as normal and ordinary banking business is to deal in money credit. The money is parked in readily marketable securities so that it is available to meet the demand of depositors. 5. On the other hand, the ld. AR of the assessee submitted that this iss....

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....well as the circular No. 6/2016 dated 29-02-2016. 6. We have heard both the parties and perused the materials available on record. It is an undisputed fact that substantial stake in M/s. CARE Ltd. was acquired itself shows that the intention to acquire the shares in the subject company was to hold as a strategic investment for a long period. On account of substantial shareholding in CARE Ltd., assessee bank has treated the same as a strategic investment but not as stock in trade and disclosed the same as an (Associate) in the annual reports. It is also not disputed fact that the funds deployed in CARE Ltd. are classified as investment and declared under the category HTM (Held to Maturity). Therefore, in our view, these shares cannot be t....

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.... assessee in a particular Asst year, then tax payers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years. 6.2 The ld. D.R. heavily relied on the judgment of Hon'ble Supreme Court in the case of Navanshahar Central Co-operative Bank Ltd. (supra) and CBDT Circular No.18/2015 dated 2.11.2015, where all investments held by the banking concern are held as part of the business of banking and accordingly pleaded that the profit on sale of such investments are to be treated as business profit u/s 28 of the Act. 6.3 We are of the considered opinion that the entire facts of the present case are different from that as that of case laws relied upon by them. In the case of Navanshahar Central Co-operative Ba....