Case Law Details
Maninagar Co. Op. Bank Ltd. Vs DCIT (ITAT Ahmedabad)
Introduction: This article dissects the case of Maninagar Co. Op. Bank Ltd. versus DCIT, as adjudicated by ITAT Ahmedabad for Assessment Year 2012-13. The primary concern revolves around the disallowance of depreciation claimed by the bank on Government Securities. Despite the continuous assertion by the bank that these were Available for Sale (AFS) securities, the Revenue authorities insisted on categorizing them as Held to Maturity (HTM), leading to the disallowance.
Detailed Analysis:
The bank, in computing its income, claimed depreciation of Rs. 4,68,391/- on Government Securities amounting to Rs. 8,23,72,763/-. The contention was that these securities were classified as AFS as per RBI guidelines, allowing depreciation based on their market value or cost at the year-end.
Despite the bank furnishing affidavits and reiterating the AFS classification, the Revenue authorities consistently labeled the securities as HTM. The disallowance was grounded in the belief that HTM securities could only be valued at cost, as per RBI guidelines.
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