TaxTMI 
TaxTMI 
2025 (4) TMI 2200
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.... from RBI. The assessee filed its original Return of Income ("ROI") for A.Y. 2015-16 on 30.10.2015 admitting total income at Rs. 895,32,71,200/-. Subsequently, the assessee filed revised ROI on 17.03.2017 admitting total income at Rs. 1828,23,32,080/-. The Learned Assessing Officer ("Ld. AO") completed the assessment u/s.143(3) of the Income Tax Act, 1961 ("the Act") on 30.12.2017 by making addition of Rs. 1485,43,30,689/- towards provision for bad and doubtful debts u/s. 36(1)(viia) of the Act Rs. 190 Crores towards disallowance of deduction claimed u/s.36(1)(vii) of the Act Rs. 23,83,000/- towards disallowance u/s.14A of the Act Rs. 140,54,00,000/- towards disallowance of provisions for wage arrears Rs. 120,23,01,307/- towards disallowance of claim of depreciation on investments and Rs. 10 lakhs towards penalty. Accordingly, the Ld. AO assessed the total income at Rs. 3764,77,47,070/-. 03. Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) partly allowed the appeal of the assessee. 04. Aggrieved with the order of Ld. CIT(A), the assessee as well as the revenue are in appeal before us. ITA No. 193/Hyd/2019 ( Assessee's appe....
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..... 4.3. Without prejudice to the above, the Commissioner of Income tax (Appeals) failed in not directing the Assessing Officer to consider only the tax-exempt investments to arrive at the disallowance u/r 8D(2)(iii). 5. The learned Commissioner of Income Tax (Appeals) erred in law and on facts in remanding the issue to the learned Assessing Officer to re-work the depreciation on investments by considering earlier years opening stock and closing balances. 5.1 The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that the investments of the appellant bank are stock in trade and the appellant bank is eligible to claim the loss arising out of the valuation of the stock at cost or market value whichever is lower. 5.2 The learned Commissioner of Income Tax (Appeals) erred in not following the decision of the Hon'ble Tribunal in the case of Appellant bank's own case. 5.3 The learned Commissioner of Income Tax (Appeals) erred in not following the binding decisions of the Hon'ble Supreme Court. The total tax effect relating to this ground is Rs. 40,86,62,214/-. 6. The learned Commissioner of Income tax....
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....med by the assessee u/s. 36(1)(viia) of the Act. The Ld. AR further submitted that, the actual nomenclature used in the books of account as "provision for NPA" is nothing but the "provision for bad and doubtful debts". The nomenclature of "provision for NPA" has been used in books of accounts as per the guidelines of RBI. It is the substance, which is to be considered for deduction and not the nomenclature. Hence, the Ld. AR submitted that, the Ld. AO as well as the Ld. CIT(A) has disallowed the claim of the assessee without considering the substance of the deduction. The Ld. AR invited our attention to para nos.23 to 30 of the decision of this Tribunal in assessee's own case for A.Ys. 2013-14 and 2014-15 in ITA Nos.350 & 351/Hyd/2018 dated 24.01.2025, wherein the ITAT has held that although the provision has been created under the head 'provision for NPA', the assessee is eligible for the deduction u/s. 36(1)(viia) of the Act. 10. Per contra, the Ld. DR relying on the order of revenue authorities, submitted that, the provision created by the assessee on NPA consists of provision created on sub-standard assets and doubtful assets. Under both the categories, the advances are ....
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....s, deduction in respect of any provision made by it for any assets classified by the Reserve Bank of India as doubtful assets or loss assets in accordance with the guidelines issued by it in this behalf, for an amount not exceeding five per cent of the amount of such assets shown in the books of account of the bank on the last day of the previous year: Provided further that for the relevant assessment years commencing on or after the 1st day of April, 2003 and ending before the 1st day of April, 2005, the provisions of the first proviso shall have effect as if for the words "five per cent", the words "ten per cent" had been substituted : Provided also that a scheduled bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed a further deduction in excess of the limits specified in the foregoing provisions, for an amount not exceeding the income derived from redemption of securities in accordance with a scheme framed by the Central Government: Provided also that no deduction shall be allowed under the third proviso unless such income has been disclosed in the return of income under the head "Profits and gains of business ....
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....ral advances, provision created u/s 36(1)(viia) is to be carried forward from year to year and whenever bad debt on account of rural advances arises, such bad debts are to be set off against the balance in provision made for rural advances/loan, but cannot be claimed/allowed as deduction by debiting to P&L account. In the present case, provision made as per section 36(1)(viia) is higher, whereas write off of actual bad debt in respect of rural advance is less. Thus, there is excess provision u/s 36(1)(viia) and the same needs to be carried forward to the subsequent A.Ys. Therefore, in our considered view, the Assessing Officer and the Ld. CIT (A) erred in making addition towards the amount lying in provision for bad and doubtful account u/s 36(1)(viia) of the Act for Rs. 1014,06,21,916/-. Further, the assessee had also proved with evidences that provision for NPA is nothing but provisions for bad and doubtful debts created in terms of section 36(1)(via) of the Act. Therefore, in our considered view, the AO cannot disallow entire deduction claimed merely on the basis of nomenclature used by the assessee." 12.3 On perusal of above, we found that, this Tribunal has held that, altho....
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....banks to RBI for not adhering to its regulations in the course of its business cannot be treated as penalties levied for offence or prohibition of an act, therefore, submitted that the additions made by the Assessing Officer should be deleted. The Ld.CIT(A) after considering the relevant submissions of the assessee held that expenditure incurred towards penalty paid to RBI for violation of provisions of section 46(4) of the Banking Regulation Act, 1949 is not a business expenditure incurred wholly and exclusively for the purpose of business of the assessee and therefore, cannot be allowed as deduction. 68. Aggrieved by the Ld.CIT(A) order, the assessee is now in appeal before the Tribunal. 69. The Ld. Counsel for the assessee submitted that the Ld.CIT(A) is erred in sustaining the additions made by the Assessing Officer towards disallowance of penalty paid to RBI for violation of section 46(4) of the Banking Regulation Act, 1949 for deviation in implementation of KYC-AML guidelines without appreciating the fact that the said payment is not penalty for committing an offence or prohibition of any law. The Ld. counsel for the assessee further submitted that this view....
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....bove provisions, it is very clear that such penalty is compensatory in nature for not adhering to guidelines, but not penal in nature. If any penalty paid by any person is only compensatory in nature, then the same cannot be treated as any expenditure incurred for the purpose which is an offence or which is prohibited by law. This legal principle is supported by the decision of ITAT Ahmedabad benches in the case of Bapunagar Mahila Co-operative Bank Ltd.(supra), where the Tribunal deleted identical additions made by the Assessing Officer towards levy of penalty by RBI for violation of its directions. In the present case, RBI imposed penalty for deviation in implementation of KYC-AML guidelines and therefore, in our considered view, the said violations cannot be considered as criminal act for which the assessee has paid penalty. Therefore, we are of the considered view that the Assessing Officer and the Ld.CIT(A) erred in disallowing penalty paid to RBI u/s 46(4) of the Banking Regulation Act, 1949 u/s 37(1) of the Act. Thus, we set aside the order of the Ld.CIT(A) on this issue and direct the Assessing Officer to delete the additions made towards disallowance of expenditure incurre....
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....s on account of non-rural advances, then, the same is not required to be deducted from the provision so created u/s.36(1)(viia) of the Act. The Ld. DR further submitted that, by insertion of Explanation 2 to section 36(1)(vii) of the Act, it has been made clear by the statute that the provision created u/s.36(1)(viia) of the Act are related to all type of advances, including rural advances. Accordingly, the total write off related to rural advances as well as non-rural advances u/s.36(1)(vii) of the Act are to be first reduce from the available balance of the provision for doubtful debts created u/s.36(1)(viia) of the Act. However, under the present case of the assessee, the assessee has not reduced the amount of write off from the balance lying under provision for doubtful debts created u/s.36(1)(viia) of the Act. Therefore, the assessee has availed double deduction, first by claiming provision u/s.36(1)(viia) of the Act and again by writing off of the advances u/s.36(1)(vii) of the Act. The Ld. DR submitted that, the allowance of double deduction is not the intention of the legislature. Hence, the claim made by the assessee u/s.36(1)(vii) of the Act without reducing the amount av....
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....ten off pertains to non-rural branches u/s 36(1)(vii) without appreciating fact that the Hon'ble Supreme Court in Para 45 in the case of Catholic Syrian Bank Ltd vs. CIT (Supra) very clearly explained the position of deduction towards provision for bad debts u/s 36(1)(viia) and deduction towards bad debt written off u/s 36(1)(vii). Further, this issue is also covered in favour of the assessee by the decision of ITAT Hyderabad in assessee's own case for the A.Y.2012-13 in ITA No. 1018/Hyd/2017, where the Tribunal by following the decision of Hon'ble Supreme Court in the case of Catholic Syrian Bank Ltd vs CIT (2012) 343 ITR 270 (SC) deleted the additions made by the AO. Therefore, he submitted that the Ld. CIT (A) has clearly erred in sustaining additions made by the Assessing Officer. 49. The Ld. DR, on the other hand, supporting the orders of the Ld. CIT (A) submitted that the law is clear in as much as after insertion of Explanation (2) by the Finance Act 2013 w.e.f. A.Y 2013-14 for the purpose of proviso to clause (vii) of section 36(1) and 36(2)(v) of the Act, the account referred to therein shall be only one account in respect of provision for bad and doubtful deb....
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....spect of non-rural branches for Rs. 166,35,33,701/- without reducing from said written off from credit balance available in provision for bad and doubtful debts created u/s 36(1)(viia) in respect of rural branches. The Assessing Officer did not accept the contention of the assessee on the ground that after insertion of Explanation (2) to provisions of sub-section (vii) of section 36(1), the account referred to therein shall be one account for all the advances including advances made by the rural branches of an assessee bank. It is the contention of the assessee that even after insertion of Explanation 2 to proviso to sub clause (vii) of section 36(1), the ratio laid down by the Hon'ble Supreme Court holds good, because the Hon'ble Apex Court has clearly explained the law in respect of deduction towards provision for bad & doubtful debts u/s 36(1)(viia) of the Act and deduction towards bad debts written off u/s 36(1)(viia) and as per the ratio laid down by the Hon'ble Supreme Court, the scheduled commercial banks would continue to get full benefit of write off of irrecoverable debts u/s 36(1)(vii) in addition to the benefit of deduction for provision for bad & doubtful d....
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....nce of the bad debt(s). In other words, the scheduled commercial banks would continue to get the full benefit of the write off of the irrecoverable debt(s) under Section 36(1)(vii) in addition to the benefit of deduction for the provision made for bad and doubtful debt(s) under Section 36(1)(viia). A reading of the Circulars issued by CBDT indicates that normally a deduction for bad debt(s) can be allowed only if the debt is written off in the books as bad debt(s). No deduction is allowable in respect of a mere provision for bad and doubtful debt(s). But in the case of rural advances, a deduction would be allowed even in respect of a mere provision without insisting on an actual write off. However, this may result in double allowance in the sense that in respect of same rural advance the bank may get allowance on the basis of clause (viia) and also on the basis of actual write off under clause (vii). This situation is taken care of by the proviso to clause (vii) which limits the allowance on the basis of the actual write off to the excess, if any, of the write off over the amount standing to the credit of the account created under clause (viia). However, the Revenue disputes the po....
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.... of the Hon'ble Supreme Court in the case of Catholic Syrian Bank Ltd vs. CIT (Supra), we direct the Assessing Officer to delete the addition made towards bad debts written off in respect of non-rural branches u/s 36(1)(vii) of the I.T. Act, 1961 for Rs. 329,62,82,921/-." 15.1 On perusal of above, we found that, the Tribunal relying on the decision of Hon'ble Supreme Court in the case of Catholic Syrian Bank Ltd. Vs. CIT (supra) has held the issue in favour of the assessee. We also found that, an amendment has been brought into the Act in the form of insertion of Explanation-2 to section 36(1)(vii) of the Act after the decision of Hon'ble Supreme Court in the case of Catholic Syrian Bank Ltd. Vs. CIT (supra). We also found that, it was not specifically brought by the revenue to the notice of the Tribunal that, allowing the deduction u/s.36(1)(vii) of the Act without reducing the same from the balance of provision for bad and doubtful debts created u/s. 36(1)(viia) of the Act, will amount to double deduction in the hands of the assessee and to avoid such double deduction Explanation-2 to section 36(1)(vii) has been inserted into the Statute. Therefore, in our opinion,....
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.... specifically mentioned under Explanation-2 to section 36(1)(vii) of the Act, that the provision of bad and doubtful debts created u/s.36(1)(viia) of the Act is related to all type of advances including rural advances. We also found that Explanation 2 has been inserted in section 36(1)(vii) after the decision of Hon'ble Supreme Court in the case of Catholic Syrian Bank Ltd. Vs. CIT (supra). Therefore, we are of the considered opinion that, the decision of Hon'ble Supreme Court in the case of Catholic Syrian Bank Ltd. Vs. CIT (supra), which is prior to the insertion of the Explanation 2 to section 36(1)(vii) of the Act is not applicable to the case of the assessee after insertion of Explanation 2 to section 36(1)(vii) of the Act. If we accept the contention of the Ld. AR, then it would amount to allowing of double deduction in the hands of the assessee. However, on perusal of above, we do not find that the allowance of double deduction is the intention of the statute. Accordingly, the assessee's claim under section 36(1)(vii), without setting off the inadmissible provision created for non-rural advances, cannot be sustained. 15.3 Otherwise also, we have gone through the d....
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....1, the taxpayer carrying on business is entitled to a deduction, in the computation of taxable profits, of the amount of any debt which is established to have become a bad debt during the previous year, subject to certain conditions. However, a mere provision for bad and doubtful debts) is not allowed as a deduction in the computation of taxable profits. In order to promote rural banking and in order to assist the scheduled commercial banks in making adequate provisions from their current profits to provide for risks in relation to their rural advances, the Finance Act inserted clause (viia) in sub-section (1) of section 36 to provide for a deduction, in the computation of taxable profits of all scheduled commercial banks, in respect of provisions made by them for bad and doubtful debts) relating to. advances made by their rural branches. The deduction is limited to a specified percentage of the aggregate average advances made by the rural branches computed in the manner prescribed by the Income-tax Rules, 1962. Thus, the provisions of clause (viia) of section 36(1) relating to the deduction on account of the provision for bad and doubtful debts) is distinct and independent of the ....
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....he proviso limits its application to the case of a bank to which clause (via) applies. Clause (Viia) applies only to rural advances. This has been explained by the Circulars issued by the Central Board of Direct Taxes. Thus, the proviso indicates that it is limited in its application to bad debts) arising out of rural advances of a bank. It follows that if the amount of bad debts) actually written off in the accounts of the bank represents only debts) arising out of urban advances, the allowance thereof in the assessment is not affected, controlled or limited in any way by the proviso to clause (vii). 46. Accordingly, the above question is answered in the affirmative, i.e., in favour of the assessee(s). For the above reasons, I agree that the appeals filed by the assessees stand allowed and the appeals filed by the Revenue stand dismissed with no order as to costs." 15.4 On perusal of above we found that, the reliance by the assessee on Catholic Syrian Bank Ltd. is misplaced. That decision was rendered in a situation where provision u/s 36(1)(viia) of the Act was created in respect of rural advances only, and deduction u/s 36(1)(vii) of the Act was claimed in respect of....
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....(Appeals) erred in directing the A.O to re-workout the disallowance of depreciation on investments Rs. 1,20,23,01,307/- wrt 'HTM' category securities without verifying from the records of bank the purpose for which they were purchased by bank initially to determine nature of securities whether they are in nature of stock in trade or investments. 7. Commissioner (Appeals) erred in directing the A.O to re-workout the disallowance of depreciation on investments Rs. 1,20,23,01,307/- wrt 'HTM' category of securities without calling for details of re- categorisation of securities made by bank during the year under consideration i.e. from AFS to HTM, HFT to HTM etc. 8. Commissioner (Appeals) erred in directing the A.O to re-workout the disallowance of depreciation on investments Rs. 1,20,23,01,307/- wrt 'HTM' category of securities without verifying whether entire 'HTM' category of securities are held to meet SLR purposes or not. 9. CIT(A) erred in ignoring the fact that Revenue's appeal on identical issue in assessee's own case for A.Y. 2006-07 is pending adjudication Hon'ble High Court. 10 Any other ground t....
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.... law. In their alternate argument, the Ld. AR contended that all the investments of the assessee are held as stock in trade. The Ld. AR also submitted that, this issue is covered by the decision of this Tribunal in assessee's own case for A.Ys. 2013-14 & 2014-15 (supra), wherein the ITAT under the identical issue has deleted the addition made by the Ld. AO. He further submitted that, as per the settled judicial precedence, disallowances u/s.14A of the Act does not apply to investment held as stock in trade. Therefore, the Ld. AR finally submitted that the disallowances made by the Ld. AO is not sustainable under the law and order of Ld. CIT(A) should be upheld. 21. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through para nos.4 to 4.6 of the order of Ld. AO which is to the following effect : " III. Disallowance expenses relatable to exempted u/s 14A: 4. From the balance sheet of the assessee, it is found that the assessee invested an amount of Rs. 315,77,04,000/- in shares and other instruments. The assessee booked interest expenditure amounting to Rs. 11830,57,12,000/....
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....n be allowed only to the extent they are relatable to the earning of taxable income" 4.4 Thus, Legislative intent is to allow only that expenditure which is relatable to earning o income and it therefore follows that the expenses which are relatable to earning of exempt income have to be considered for disallowance, irrespective of the fact whether any such income has been earned during the financial year or not. 4.5 The above position is further clarified by the usage of term' includible' in the heading to section 14A of the Act and also the heading to Rule 8D of IT Rules, 1962 which indicates that it is not necessary that exempt income should necessarily be included in a particular year's income, for disallowance to be triggered. Also, section 14A of the Act does not use the word "income of the year" but "income under the Act". This also indicates that for invoking disallowance under section 14A, it is not material that assessee should have earned such exempt income during the financial year under consideration. 4.6 In view of the above discussions and also having regard to the accounts of the assessee, the correctness of the claim of the as....
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....14-15 (supra), wherein at para no. 36 and para no. 37, the ITAT has held as under : " 36. We, find that an identical issue has been considered by the Tribunal in assessee's own case in ITA No. 1018/Hyd/2017 for the A.Y.2012-13, where the issue has been discussed in detail in light of the decision of Hon'ble Supreme Court in the case of Maxopp Investments Ltd vs. CIT reported in (2018) 402 ITR 640 (S.C). The relevant findings of the Tribunal are as under: "42. We have gone through the reasons given by the Assessing Officer and the learned CIT (A) to uphold the addition towards disallowance of expenditure u/s 14A of the Act, r.w.r 8D of IT Rules, 1962, in light of argument of the learned Counsel for the assessee along with certain judicial precedents, including the decision of the Hon'ble Supreme Court in the case of Maxopp Investments Ltd vs. CIT (Supra). The Hon'ble Supreme Court has discussed this issue at length in the case of Maxopp Investments Ltd vs. CIT (Supra) in Paras 36 to 41 and more particularly in Para No.39, where it is clearly discussed the issue of applicability of provisions of section 14A r.w.r 8D in case of dividend income earned by any a....
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....t clear that the issue was as to whether income by way of interest on securities shall be chargeable to income tax under the head 'income from other sources' or it is to fall under the head 'profits and gains of business and profession'. The Board, going by the decision of this Court in Nawanshahar case, clarified that it has to be treated as income falling under the head 'profits and gains of business and profession'. The Board also went to the extent of saying that this would not be limited only to co-operative societies/Banks claiming deduction under Section 80P(2)(a)(i) of the Act but would also be applicable to all banks/commercial banks, to which Banking Regulation Act, 1949 applies. 38) From this, Punjab and Haryana High Court pointed out that this circular carves out a distinction between 'stock-in-trade' and 'investment' and provides that if the motive behind purchase and sale of shares is to earn profit, then the same would be treated as trading profit and if the object is to derive income by way of dividend then the profit would be said to have accrued from investment. To this extent, the High Court may be correct. At the same time, we do not agree with the test....
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.... shares are held by the assessee, though the assessee has to ultimately trade those shares by selling them to earn profits. The situation here is, therefore, different from the case like Maxopp Investment Ltd. where the assessee would continue to hold those shares as it wants to retain control over the investee company. In that case, whenever dividend is declared by the investee company that would necessarily be earned by the assessee and the assessee alone. Therefore, even at the time of investing into those shares, the assessee knows that it may generate dividend income as well and as and when such dividend income is generated that would be earned by the assessee. In contrast, where the shares are held as stockin-trade, this may not be necessarily a situation. The main purpose is to liquidate those shares whenever the share price goes up in order to earn profits. In the result, the appeals filed by the Revenue challenging the judgment of the Punjab and Haryana High Court in State Bank of Patiala also fail, though law in this respect has been clarified hereinabove. 41) Having regard to the language of Section 14A(2) of the Act, read with Rule 8D of the Rules, we also make....
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....t of the decision of the Hon'ble Supreme Court in the case of Maxopp Investments Ltd vs. CIT (Supra), State Bank Patiala vs. CIT (Supra), PCIT vs. Punjab Sindh Bank and other decisions relied upon by the assessee, we set aside the issue to the file of the Assessing Officer and direct the Assessing Officer to reexamine the issue in light of our discussion given herein above and also the decisions cited by the assessee and considered by us.' 37. In view of this matter and considering the facts of the case and also by following the decision of ITAT, in assessee's own case for the A.Y.2012-13, we are of the considered view that the issue needs to go back to the file of the AO for reconsideration. Thus, we set aside the order of the Ld.CIT(A) on this issue and restore the issue back to the file of the AO and also direct the AO to reconsider the issue of disallowance u/s 14A of the Act in light of our discussion given herein above and also by considering the decision of ITAT, Hyderabad benches in assessee's own case for the A.Y.2012-13 and recompute the disallowance as per law." 21.3 On perusal of above, we found that the Tribunal had set aside the issue to the file of Ld....
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....t due to the employees. It was the argument of the Ld. counsel for the assessee that in banking sectors the wages of the employees are revised periodically and in anticipation of wage arrears, the assessee has made adhoc provision for wage arrears. The assessee further submitted that this issue is squarely covered in favour of the assessee by the decision of Hon'ble Delhi High Court in the case of CIT Vs. Bharat Heavy Electricals (2013) 352 ITR 88, where the Hon'ble Delhi High Court held that once there is no dispute with regard to terms of employment between the workers and officers with the bank and dispute is only with regard to quantification of the compensation of wages, then provision created by the assessee for wage arrears in anticipation for revision in pay cannot be treated as unascertained liability. Therefore, he submitted that the additions made by the AO should be deleted. 43. The Ld.DR on the other hand supporting the order of the Ld.CIT(A) submitted that the assessee has made adhoc provision for wage arrears even though the negotiations with the employees and officers are not in progress. Further, the assessee has not quantified the exact amount of arrears ....
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....352 ITR 88 (Del), where the Hon'ble High Court has considered an identical issue of provision made for wage arrears and after considering the relevant facts, held that once provision is on the basis of scientific method and historical trends, then the same cannot be treated as unascertained liability. Similar view has been taken by the Hon'ble High Court of Rajasthan in the case of Principal Commissioner of IT Ajmer Vs. Erstwhile Raj Gramin Bank, Alwar 2017(11) TMI 129, where the Hon'ble High Court by following the decision of Hon'ble Delhi High Court in the case of CIT Vs. Bharat Heavy Electricals Ltd. (supra) allowed the provision created for wage settlements. 45. In view of this matter and by respectfully following the decision of Hon'ble Delhi High Court and Rajasthan High Court in the cases cited above, we are of the considered view that the AO and the Ld.CIT(A) erred in disallowing the provision created for wage arrears. Thus, we set aside the order of the Ld.CIT(A) on this issue and direct the AO to delete the additions made towards disallowance of provisions for wage arrears. " 23.1 On perusal of above, we found that, this Tribunal has held that the provision cr....
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....he value of any investment, the assessee has not considered the same. Accordingly, the method of valuation adopted by the assessee ignoring the appreciation in the value of investment is not in accordance with law. (ii) In the alternate argument, the Ld. DR submitted that, as per their argument submitted in support of ground no.1, all the investments are not in the nature of stock in trade. Accordingly, the method of valuation adopted by the assessee for stock in trade cannot be equally applied to the investments which are not in the nature of stock in trade. The investments which are not in the nature of stock in trade are liable to be valued at cost. The Ld. DR also submitted that, this Tribunal in assessee's own case for A.Y. 2006-07 has decided the issue in favour of the assessee on the assumption that all the investments of the assessee are in the nature of stock in trade, however, which is not true. Therefore, the decision of this Tribunal in assessee's own case for A.Y. 2006-07, cannot be applicable to the present case. Accordingly, the Ld. DR submitted that, the valuation of the investments are required to be recalculated and the issue is liable to be set aside to t....
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....chever is lower. 57. On appeal, the Ld. CIT (A) by following the decision of the ITAT Hyderabad Benches in appellant's own case for A.Y 2006- 07 deleted the addition made by the Assessing Officer. 58. The Ld. DR submitted that the Ld. CIT (A) is erred in deleting the addition made by the Assessing Officer towards diminution in value of investment without appreciating the fact that the said diminution in the value of investment was not provided for in the books of account of the assessee bank. 59. The Ld. Counsel for the assessee, on the other hand, supporting the order of the Ld. CIT (A) submitted that this issue is squarely covered in favour of the assessee by the decision of the ITAT Hyderabad Benches in the appellant's own case for the A.Y 2006-07, where under identical set of facts, the Tribunal held that the deduction towards diminution in value of investment is allowable deduction. 60. We have heard both parties, perused the material available on record and gone through the orders of the authorities below. We find that, this issue is squarely covered in favour of the assessee by the decision of the ITAT Hyderabad Benches, in appellant's own....