Relief to Punjab & Sind Bank: ITAT deletes Disallowance of Depreciation on Securities [Read Order]

In a major relief to Punjab & Sind Bank, the Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the disallowance of depreciation on securities.

The Assessee, Punjab & Sind Bank is a Bank who electronically filed its return of income for A.Y. 2014-15 on 28.11.2014 declaring loss under the normal provision of the Income Tax Act and Book Profit u/s 115JB of the Act. The return of income was subsequently revised without any change in the income that was filed in the original return. Thereafter, the case was selected for scrutiny and consequently assessment was framed u/s 143(3) of the Act vide order and the total income was determined.

During the course of assessment proceedings, AO noticed that the assessee had claimed the depreciation on securities. The assessee was asked to justify the claim of depreciation to which assessee inter alia submitted that for the income-tax purpose, Bank was treating all securities irrespective of its category viz HTM, AFS & HFT in the books as ‘Stock-in-Trade’ consistently and it was as a generally accepted principle valued at “cost” or “market price” whichever is lower. It was further submitted that the classification and valuation of investment by the Bank was made as per RBI’s guidelines which were mandatory in nature. The submissions of the assessee was not found acceptable to AO as he was of the view that since the investments have not been shown by assessee as ‘Stock-in-Trade’ and its resultant profits and sale were not enhanced by the value of depreciation in subsequent years when those investments were actually sold, the claim of assessee was not allowable. He accordingly denied the claim of depreciation.

The coram of Judicial Member, Narendra Kumar Choudhary and Accountant Member, Anil Chaturvedi held that earlier year has been pointed out nor has Revenue placed any material on record to demonstrate that the order of Tribunal in assessee’s own case for earlier years has been set aside/overruled or stayed by higher judicial forum. 

“We find that identical issue arose before the Co-ordinate Bench of Tribunal in assessee’s own case for A.Y. 2013-14 and the Co- ordinate Bench of Tribunal, by following the order in assessee’s own case for A.Y. 2011-12 & 2012-13, deleted the addition,” the ITAT while dismissing the appeal of the revenue said.

To Read the full text of the Order CLICK HERE

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