The Tax Publishers2020 TaxPub(DT) 5135 (Mad-HC)

INCOME TAX ACT, 1961

Section 260A

Where securities were held as stock-in-trade and the income from sale therefrom was offered to tax as revenue and it was seen that expenditure incurred by assessee towards broken period was liable to be allowed as revenue expenditure, therefore, following the decision of High Court in American Express International Banking Corporation v. CIT (2002) 258 ITR 601 (Bom) : 2002 TaxPub(DT) 1663 (Bom-HC), question was answered in favour of the assessee.

Appeal (High Court) - Amortisation and brokerage expenses with respect to securities Held-to-maturity category - Expenditure incurred by assessee towards broken period was liable to be allowed -

The question of law for consideration was as to whether Tribunal was right in holding that the amortisation expenses with respect to securities of (Held-to-maturity) HTM category is allowable as revenue expenditure. Held: The finding of fact was to the effect that securities are held as stock-in-trade and the income from sale therefrom was offered to tax as revenue. In the light of the admitted facts as seen from the order of the authorities, expenditure incurred by assessee towards broken period was liable to be allowed as revenue expenditure. The question was answered in favour of the assessee, following the decision of the Bombay High Court in American Express International Banking Corporation v. CIT (2002) 258 ITR 601 (Bom) : 2002 TaxPub(DT) 1663 (Bom-HC).

Followed:CIT v. The Lakshmi Vilas Bank Ltd. [Tax Case (Appeal) Nos.826 to to 828 of 2008, dt. 1-2-2017], CIT v. Karur Vysya Bank Ltd. (TCA. No. 2139 of 2008, dated 13-7-2009) : 2010 TaxPub(DT) 596 (Mad-HC), American Express International Banking Corporation v. CIT. (2002) 258 ITR 601 (Bom) : 2002 TaxPub(DT) 1663 (Bom-HC) and Lakshmi Vilas Bank Ltd. v. The Asstt./Jt. CIT and Vica-Versa 2016 TaxPub(DT) 2384 (Chen-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2004-05



IN THE MADRAS HIGH COURT

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com