Case Law Details
Pathankot Hindu Urban Co-operative Bank Ltd Vs DCIT (ITAT Amritsar)
In this case assessee claimed the loss on diminution value of securities as well as stock. The main grievance of the revenue is that this particular value was not taken in the books of accounts. But factually correct that the circular of the CBDT has directed the acceptance proposition of the diminution value on basis of the factual aspect. The Hon’ble Apex Court has not in favour of the revenue. In both the lower authorities, the assessee explained the issue. After a thoughtful consideration of this fact and considering the factual matrix the depreciation or diminution value of investment a security is an acceptable claim under the Income tax Act. Only the reflection in the books of account during the year cannot be the reason for nonacceptance of the depreciation. The depreciation in stock or the selling investment has a clear effect on the net profit which is after all taken into the computation of the assessee. The provision of depreciation / diminution in the value of investment is acted through “investment fluctuation reserve account”. Considering the entire factual matrix and respectfully consider the order of the Hon’ble Apex Court we set aside the order of the appellate authority. We set-aside the matter to the ld. CIT(A). The issue should be considered on basis the above-mentioned discussion. Needless to say, that the ld. CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax(Appeals)-2,Amaritsar, [in brevity the CIT(A)] bearing appeal No.97/2013-14, date of order 12.03.2015, the order passed u/s 250(6) of the Income Tax Act 1961, [in brevity the Act] for A.Y. 2010-11.The impugned order was emanated from the order of the ld. Dy. Commissioner of Income Tax, Circle-VI, Pathankot, (in brevity the AO) order passed u/s 143(3)of the Act date of order 22.03.2013.
2. The brief fact of the case is that the assessee is that the assessee is a cooperative bank and claimed the depreciation or diminution and value of investment or securities held under “available for sale”. The value of diminution was as per the circular of the Reserve Bank of India (in short RBI) on investment made by Primary Urban Cooperative Bank Ltd. the date of order 01.07.2019. The claim was made at the end of the year. So there is no effect in the books of account. The amount was finally deducted from the computation of income during filing of return. u/s 139. The value of diminution amount of Rs.22,13,000/- which was duly added back with the total income of the assessee. Aggrieved assessee filed an appeal before the ld. CIT(A) against the order of ld. AO. The ld. CIT(A) upheld the order of the ld. AO.
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