The DCIT, Circle-1(2), Ahmedabad V. M/s. Textile Traders Co.Operative Bank Ltd., Ahmedabad

ITA 175/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7948 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 19-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.175/AHD/2015 ( / ASSESSMENT YEAR : 2011-12) DCIT CIRCLE-1(2) AHMEDABAD / VS. TEXTILE TRADERS CO-OP.BANK LTD. 468/4/5, PARSI CHAWL MASKATI MARKET AHMEDABAD $ ./ ./ PAN/GIR NO. : AAAFT 8905 H ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI KEYUR PATEL, SR.DR ($'* ) / RESPONDENT BY : SHRI S.N. SOPARKAR, AR +,*- / DATE OF HEARING 13/12/2017 ./0*- / DATE OF PRONOUNCEMENT 20 / 12 /2017 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTAN CE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XX, AHMEDABAD [CIT(A) IN SHORT] DATED 13/11/2014 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOM E TAX ACT, 1961 ITA NO.175/AHD/ 2015 DCIT VS. TEXTILE TRADERS CO-OP.BANK LTD. ASST.YEAR 2011-12 - 2 - (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 16/12 /2013 RELEVANT TO ASSESSMENT YEAR (AY) 2011-12. 2. THE GROUND OF APPEAL RAISED BY THE REVENUE REA D AS UNDER:- THAT THE LD.CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS.1,00,52,000/- BEING NOTIONAL LOSS FOR THE SALE O F SECURITY WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS SOLD TH E PROPERTY/GOVT.SECURITY PRIOR TO THE DATE OF MATURIT Y. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER TO THE EXTENT MENTIONED ABOVE SINCE THE ASSESSEE HAS FAILED TO DI SCLOSE HIS TRUE INCOME/BOOK PROFIT. 3. BRIEFLY STATED, THE ASSESSEE IS A CO-OPERATIVE B ANK ENGAGED IN BANKING BUSINESS. DURING THE COURSE OF BUSINESS, T HE ASSESSEE IS STATED TO HAVE INCURRED LOSS ON PREMATURE SALE OF CERTAIN SEC URITIES (BONDS) AMOUNTING TO RS.1,96,32,000/- WHICH IS CLAIMED AS B USINESS LOSS BY THE ASSESSEE. THE ASSESSING OFFICER (AO) HOWEVER TREAT ED THE AFORESAID BUSINESS LOSS AS NOTIONAL LOSS WHICH WAS WORKED OUT TO RS.1,00,52,000/- AFTER MAKING ADJUSTMENTS TOWARDS AMORTIZATION OF PR EMIUM ON SECURITIES AMOUNTING TO RS.85,80,000/-. IN SHORT, THE AO DISA LLOWED THE LOSS ON SALE OF THE GOVERNMENT SECURITIES FOR THE REASON TH AT LOSS INCURRED ARE NOT THE ACTUAL LOSS BUT ARE NOTIONAL LOSS OWING TO THE FACT THAT DUE DATE/MATURITY DATE FOR SALE OF THE AFORESAID GOVERN MENT SECURITIES AS PER INVESTMENT REGISTER WAS ON 26/08/2011 I.E. FALLING IN SUBSEQUENT ITA NO.175/AHD/ 2015 DCIT VS. TEXTILE TRADERS CO-OP.BANK LTD. ASST.YEAR 2011-12 - 3 - ASSESSMENT YEAR THE AO REJECTED THE CLAIM OF BUSIN ESS LOSS ON THE GROUND THAT SECURITIES WERE SOLD BEFORE THE DUE DAT E AND HELD THAT NOTATIONAL LOSS WAS NOT ALLOWABLE AS PER INSTRUCTIO N NO.3/2010 DATED 23/03/2010. ACCORDINGLY, AN ADDITION OF RS.1,00,52 ,000/- WAS MADE BY THE AO TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 5. THE CIT(A) EXAMINED THE FACTS IN ISSUE AND FOUND THAT THE LOSS CLAIMED BY THE ASSESSEE IS ACTUAL LOSS AS OPPOSED T O THE CONTENTION OF THE AO THAT IT IS A NOTIONAL LOSS OF CONTINGENT NATURE. THE CIT(A) AFTER GOING TO THE FACTS AND THE CIRCUMSTANCES OF THE CASE, DEL ETED THE AFORESAID ADDITION. IT WILL BE APT TO REPRODUCE THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) DELETING WITH THE ISSUE. DECISION: 5.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSION MADE BY THE APPELLANT. THE AO HAS MADE THE DISALLOWANCE OF RS. 1,00,52,000 /- BEING THE NOTIONAL LOSS WORKED OUT ON THE SALE/MATURITY OF SECURITIES. DURI NG THE YEAR, THE APPELLANT HAS INCURRED THE ACTUAL LOSS OF RS. 1,86,32,000/- ON TH E SECURITIES OF WHICH DETAILS ARE AS UNDER:- NAME SECURITY DATE OF RECEIPT AMOUNT OF PURCHASE (RS.) AMOUNT RECEIVED (RS.) LOSS (RS.) INDUSTRIAL INVESTMENT BANK OF INDIA 10/01/2011 101830000 85000000 -16830000 ITA NO.175/AHD/ 2015 DCIT VS. TEXTILE TRADERS CO-OP.BANK LTD. ASST.YEAR 2011-12 - 4 - GUJARAT URJA VIDHYUT LIMITED 23/09/2010 10505000 10000000 -505000 TAMILNADU INDUSTRIAL INVESTMENT CORP. LTD. 18/02/2011 10647000 10000000 -647000 NATIONAL HOUSING BANK 15/10/2010 13150000 12500000 -650000 TOTAL 136132000 117500000 -18632000 IN THE COMPUTATION OF TOTAL INCOME, THE APPELLANT H AS ALREADY ADDED BACK THE AMORTIZATION OF THE PREMIUM ON SECURITIES AT RS.85, 80,000/-. SINCE THE SAME HAS ALREADY BEEN ADDED BACK BY THE APPELLANT AND HENCE THE SUBSEQUENT LOSS OF RS. 1,00,52,000/- HAS BEEN DISALLOWED BY THE A.O. IN TH E ASSESSMENT COMPLETED. WHILE MAKING THE DISALLOWANCE THE AO CONCLUDED THAT THE L OSS CLAIMED BY THE APPELLANT WAS A NOTIONAL LOSS AND IT WAS THE INVESTMENT IN SECURI TIES. THE INVESTMENT WAS AS PER THE GUIDELINES OF THE RBI. FURTHER AS PER THE APPELLANT IT WAS A ROUTINE BUSINESS ACTIVITY AS A PART OF BANKING BUSINESS. THE AO DISALLOWED TH E LOSS FOR THE REASON THAT THE LOSS INCURRED WAS NOT THE ACTUAL LOSS BUT WAS THE NOTION AL LOSS AS HE COULD SEE FROM THE INVESTMENT REGISTER WHEREBY THE DUE DATE WAS NOTED AS 26.8.2011. BUT THE SECURITIES WERE SOLD BEFORE THE DUE DATE. THE AO MENTIONED THA T AS PER INSTRUCTION NO.3/2010 DTD. 23.3.2010 THE NOTIONAL LOSS WAS NOT ALLOWABLE FOR~ THE REASON THAT NO SALE OR SETTLEMENT HAD ACTUALLY TAKEN PLACE AND SUCH LOSS W AS ON MARKED TO MARKET BASIS WHICH HAS RESULTED IN REDUCTION OF THE PROFITS. THI S NOTIONAL LOSS WAS CONTINGENT IN NATURE AND COULD NOT BE ALLOWED TO BE SET OFF AGAIN ST THE TAXABLE INCOME. HE ALSO MENTIONED THAT THE INCOME-TAX ACT IS AN ACT RELATIN G TO CHARGE OF TAX ON THE INCOME OF THE PERSON AND IT IS NOT OVER RIDDEN BY THE RBI ACT , THEREFORE THE INVESTMENTS MADE AS PER THE RBI NORMS ARE TO BE GOVERNED BY THE I.T ACT SEPARATELY. 5.4. ON THE OTHER SIDE, THE APPELLANT CLAIMED THAT THE LD.CIT(A) IN APPELLANT'S OWN CASE FOR THE A.Y. 1998-99 IN APPEAL NO.CIT(A)-VI(WD .1(5)/130/2000-01 AFTER CONSIDERING THE OBSERVATIONS OF THE ITAT THE INVEST MENT ACTIVITY OF THE APPELLANT WAS TREATED AS PART OF THE NORMAL TRADING ACTIVITY OF N ORMAL BANKING BUSINESS. HE HAS ALSO QUOTED THE DECISION OF HON'BLE ITAT, SPECIAL BENCH, AHMEDABAD IN ITS ORDER DTD. 20.11.2002 IN THE CASE OF SURAT CO-OP. BANK HOLDING THAT THE INVESTMENT FULFILLS ALL THE TEST OF BEING TREATED AS PART OF NORMAL TRADING ACTIVITIES OF NORMAL BANKING BUSINESS. THE RELEVANT FINDINGS OF THE DECISION OF HON'BLE ITAT SPECIAL BENCH IS AS UNDER:- ITA NO.175/AHD/ 2015 DCIT VS. TEXTILE TRADERS CO-OP.BANK LTD. ASST.YEAR 2011-12 - 5 - 50. THE NATURE OF INVESTMENT MADE IN ALL THESE CASE S IN APPROVED GOVERNMENT SECURITY/ OTHER APPROVED INVESTMENTS WHICH ARE PERM ISSIBLE UNDER THE PROVISION OF THE BR ACT AND/OR SECTION 71 OF THE GU JARAT CO-OPERATIVE SOCIETIES ACT, 1961 OR AUTHORIZED BY CIRCULARS/NOTI FICATIONS INVESTMENTS - WHICH ARE PART OF NORMAL TRANSACTIONS CARRIED OUT B Y SUCH COOPERATIVE BANKS. SUCH INVESTMENTS HAVE BEEN MADE BY THESE COOPERATIV E BANKS IN CONSONANCE WITH THE SOUND BANKING PRACTICE ADOPTED BY ALMOST A LL CO-OPERATIVE BANKS FOR LAST SEVERAL YEARS. THE SAID INVESTMENTS FULFILL AL L THE TESTS OF BEING TREATED AS PART OF NORMAL TRADING ACTIVITIES OF BANKING BUSINE SS AS LAID DOWN BY THE VARIOUS JUDGMENTS REFERRED TO HEREINBEFORE.' FURTHER THE HON'BLE ITAT, AHMEDABAD BENCH IN THE CA SE OF STATE BANK OF SAURASHTRA, BHAVNAGAR VS. DCIT (93 ITD 662) HAS ALSO ENDORSED T HAT THE TREATMENT OF INVESTMENT ACTIVITY CARRIED OUT BY THE BANKS CONSIDERED AS BUS INESS ACTIVITY AND THE RELEVANT FINDINGS OF THE SAME ARE ONCE AGAIN REPRODUCED AS U NDER.- '. . . THE BANK IS REQUIRED TO INVEST AND TO KEEP I NVESTED CERTAIN SPECIFIED PERCENTAGE OF ITS DEMAND AND TIME LIABILITIES AS PR ESCRIBED BY THE RBIFROM TIME TO TIME, IN CERTAIN APPROVED SECURITIES AND TH EREFORE SUCH INVESTMENTS IN SECURITIES HAS TO BE CLOSELY AND INTIMATELY CONNECT ED WITH THE BUSINESS OF THE ASSESSEE. . . . THE SECURITIES ARE REQUIRED IN THE NORMAL COURSE OF BANKING BUSINESS WHICH REQUIRES KEEPING OF ENOUGH CASH AND EASILY REALIZABLE SECURITIES TO MEET ANY POSSIBLE DEMAND OF THE DEPOS ITORS. THEY ARE SO REQUIRED AS PER GUIDELINES OF RBI. THE CIRCULAR NO. 599, DATED 24-4-1991 ALSO DECLARED SUCH SECURITIES AS STOCK- IN-TRADE OF THE BANKS......'. IN VIEW OF THE AFORESAID DISCUSSION, THE INVESTMENT IN SECURITIES AND THE INCOME DERIVED THEREFROM WAS NOTHING BUT THE BUSINESS INCO ME ONLY AND THIS HAS ALSO BEEN ACCEPTED BY THE A.O. IN APPELLANT'S OWN CASE FOR A. Y. 2007-08 ALSO. 5.5. FURTHER THE APPELLANT HAS GIVEN THE COMPLETE D ETAILS OF THE PURCHASES OF THE SECURITIES AND THE SALE PROCEEDS ON ACCOUNT OF MATU RITY/PRE-MATURITY OF EACH OF THE SECURITIES ALONGWITH EVIDENCES IN THE FORM OF PAYME NT ADVICE RECEIVED FROM THE RESPECTIVE PARTIES. SO THERE IS NO DOUBT ABOUT THE MATURITY OF EACH OF THE FOUR SECURITIES TAKEN PLACE IN THE YEAR UNDER CONSIDERAT ION AND ACCORDINGLY THE APPELLANT HAS DERIVED THE LOSSES ON SALE OF SUCH SECURITIES. IT IS WORTH HERE TO MENTION THAT AS PER THE RBI GUIDELINES THE PREMIUM PAID ON EACH OF THE SECURITIES HAS BEEN WRITTEN ITA NO.175/AHD/ 2015 DCIT VS. TEXTILE TRADERS CO-OP.BANK LTD. ASST.YEAR 2011-12 - 6 - OFF BY THE APPELLANT IN ITS BOOKS OF ACCOUNT DURING THE HOLDING PERIOD BUT AT THE SAME TIME IN THE COMPUTATION OF INCOME SUCH WRITTEN OFF AMOUNT OF THE PREMIUM PAID HAS BEEN ADDED BACK AND THE TAXES THEREUPON HAS BEEN PA ID. FROM THE COPIES OF COMPUTATION OF RETURN OF INCOME SUCH AMOUNT OF WRIT TEN OFF THE PREMIUM PAID AND WHICH HAS BEEN ADDED BACK IN THE VARIOUS YEARS IS N OTED AS UNDER:- A.Y. AMOUNT ADDED BACK IN THE COMPUTATION OF INCOME 2006-07 RS.2105056/- 2007-08 RS.3293056/- 2008-09 RS.3293056/- 2009-10 RS.3293056/- 2011-12 RS.8580000/- SINCE THE APPELLANT HAS NOT CLAIMED ANY DEDUCTION T OWARDS THE WRITTEN OFF AMOUNT OF THE PREMIUM PAID ON PURCHASE OF SECURITIES OUT OF THE PROFITS OF THE PRECEDING YEARS THEREFORE THE COST OF ACQUISITION OF SUCH SECURIT IES ITSELF HAS TO BE TAKEN INTO CONSIDERATION TO ARRIVE AT THE PROFIT/LOSS INCURRED DURING THE YEAR WHEN THE SAID SECURITIES WERE MATURED/PRE-MATURED. THUS, CONSIDER ING THE COST OF PURCHASES AND THE SALES PROCEEDS ON EACH OF THE SECURITIES RECEIVED B Y THE APPELLANT IN THE YEAR UNDER CONSIDERATION THE APPELLANT HAS INCURRED THE LOSSES OF RS. 1,86,32,000/-OUT OF WHICH HE HAS ALREADY OFFERED THE SECURITY PREMIUM AMOUNT OF RS.85,80,000/-. THEREFORE THE APPELLANT WAS ELIGIBLE TO CLAIM THE LOSSES HAVING I NCURRED DURING THE YEAR UNDER CONSIDERATION AND AO'S ACTION FOR MAKING THE DISALL OWANCES OF SUCH LOSSES IS NOT CORRECT AND JUSTIFIED. IN THIS REGARD THE RELIANCE HAS ALSO BEEN PLACED BY THE APPELLANT ON THE DECISION OF HON'BLE MUMBAI HIGH COURT IN THE CASE OF DCIT VS. BANQUE INDOSEUEZ (KNOWN AS CREDIT AGRICOLE INDOSUEZ) (28 T AXMAN.COM 121 (MUM.). FOR THE SAKE OF REFERENCE THE FINDING OF THE HON'BLE MUMBAI HIGH COURT SUPPORTING THE CLAIM OF LOSSES WHEN NO DEDUCTION WITH REGARD TO THE WRIT TEN OFF OF THE PREMIUM AMOUNT PAID ON PURCHASE OF THE SECURITIES HAS BEEN ALLOWED AND IN THAT CASE REDUCING THE COST OF PURCHASES FROM THE SALE PROCEEDS AT THE TIM E OF MATURITY/PRE-MATURITY WAS HELD TO BE JUSTIFIED. ITA NO.175/AHD/ 2015 DCIT VS. TEXTILE TRADERS CO-OP.BANK LTD. ASST.YEAR 2011-12 - 7 - '31. LAST GROUND OF THE ASSES SEE'S APPEAL IS AGAIN ST THE DIRECTION OF THE LEARNED CIT(A) IN ALLOWING WRITE OFF OF PREMIUM PAI D ON PURCHASE OF SECURITIES AMORTISED OVER THE LIFE OF INVESTMENTS. THE ASSESSING OFFICER DISALLOWED A SUM OF RS.3,27,85,891 BEING AMORTIZATI ON OF PREMIUM ON INVESTMENT. THE LEARNED CIT(A)UPHELD THE DISALLOWAN CE OF PREMIUM PAID ON INVESTMENTS. HE HOWEVER AGREED WITH THE ALTERNATIVE PLEA OF THE ASSESSEE THAT : 'AS AND WHEN THESE SECURITIES ARE SOLD, INCOME FR OM THEM SHOULD BE COMPUTED WITH REFERENCE TO THE COST OF PURCHASE OF SECURITIES BY IGNORING ADJUSTMENT MADE IN BOOKS OF ACCOUNT IN THIS RESPECT BY THE APPELLANT. THE A.O. IS DIRECTED ACCORDINGLY'. THE FACTS OF THIS GR OUND ARE THAT THE ASSESSEE WROTE OFF PREMIUM PAID ON PURCHASE OF SECURITIES WH ICH WAS AMORTIZED OVER THE LIFE OF INVESTMENT. THE LEARNED CIT(A) HELD THA T WHEN SECURITIES ARE PURCHASED FROM MARKET AT MARKET VALUE, THERE CAN BE NO QUESTION OF CARRYING THE STOCK AT A LOWER PRICE BY WRITING OFF THE PREMI UM PAID ON PURCHASE OF SECURITIES, AS DONE BY THE ASSESSEE. WE ARE IN AGRE EMENT WITH THE VIEW CANVASSED BY THE LEARNED CIT(A) FOR THE OBVIOUS REA SON THAT WHEN THE ASSESSEE IS PURCHASING SECURITIES AS STOCK-IN-TRADE , THERE CAN BE NO QUESTION OF AMORTIZING THE PREMIUM PAID FOR THE PURCHASE OF SECURITIES OVER THE LIFE OF SUCH SECURITIES. THE PURCHASE PRICE SO PAID HAS TO BE TAKEN AS SUCH BY DISREGARDING THE ASSESSES'S VIEWPOINT THAT THE PREM IUM ON PURCHASE OF SECURITIES SHOULD BE AMORTIZED OVER THE LIFE OF INV ESTMENT. TO THIS EXTENT WE APPROVE THE VIEW TAKEN BY THE LEARNED CIT(A). THE L EARNED AR ARGUED THAT IF THIS -WAS TO BE UPHELD THEN THE DIRECTION OF THE LE ARNED CIT(A) BE MODIFIED IN THE SENSE THAT NOT ONLY WHEN THE SECURITIES ARE NOT ONLY SOLD BUT ALSO EVEN WHEN THESE GET MATURED, INCOME FROM THEN SHOULD BE COMPUTED WITH REFERENCE TO THE COST OF PURCHASE OF SECURITIES. WE ARE AGREE ABLE WITH THIS CONTENTION. THE OBVIOUS REASON IS THAT THE SECURITIES CAN BE SO LD OR MATURE OVER THE PERIOD. ONCE THE AMORTIZATION IS NOT ALLOWED, PURCH ASE PRICE IS TO BE TAKEN AS SUCH IRRESPECTIVE OF THE FACT WHETHER THE SECURITIE S ARE SOLD OR GET MATURED. THE DIRECTION GIVEN BY THE LEARNED CIT(A) TO THE AL TERNATIVE PLEA OF THE ASSESSEE, IS ACCORDINGLY MODIFIED.' THE AO HAS SIMPLY QUOTED THE DUE DATE OF ONE SCRIP I.E. IIBI OF WHICH DUE DATE WAS 26.8.2011 TO ARRIVE AT THE CONCLUSION THAT ALL THE LOSSES ON EACH OF THE SECURITIES WERE CONTINGENT LOSSES/NOTIONAL LOSSES WHICH HAVE NOT BE EN ALLOWED IS NOT CORRECT. IN FACT IN RESPECT OF THE SECURITY OF IIBI ALTHOUGH THE DUE DATE WAS 26.8.2011 BUT AS PER THE PAYMENT ADVICE DT. 12.1.2011 WHICH WAS ALSO SUBMITT ED BEFORE THE A.O. AND THE APPELLANT HAS BEEN ISSUED THE CHEQUE NO.000560 DTD. 10.1.2011 FOR THE NET AMOUNT OF RS.9,63,04,184/-DRAWN ON HDFC BANK TOWARDS REDEMPTI ON OF THE BONDS WHICH INCLUDED THE ACCRUED INTEREST UPTO 7.12.2010. SO IN THIS CASE THE SECURITY WERE PRE- ITA NO.175/AHD/ 2015 DCIT VS. TEXTILE TRADERS CO-OP.BANK LTD. ASST.YEAR 2011-12 - 8 - REDEEMED IN THE YEAR UNDER CONSIDERATION THEN THE D UE DATE OF REDEMPTION BECOMES IMMATERIAL.. LIKEWISE IN THE CASE OF OTHER SECURITI ES NAMELY GUVL THE REDEMPTION THROUGH PAYMENT ADVICE DTD. 15.9.2010 WAS MADE (DAT E OF MATURITY 24.9.2010) AND THE APPELLANT HAS RECEIVED THE CHEQUE NO.967139 DTD .23.9.2010 FOR THE TOTAL AMOUNT OF RS.1,05,17,500/-. THE PAYMENT ADVISE WAS SUBMITT ED TO THE A.O. VIDE ANNEURE-2 OF THE LETTER. FURTHER WITH REGARD TO THE SECURITY OF THE TAMILNADU INDUSTRIAL INVESTMENT CORPORATION LTD. THE PAYMENT ADVISE WAS DT. 10.2.20 11 THROUGH WHICH THE CHEQUE NO.390414 DTD. 18.2.2011 FOR AN AMOUNT OF RS.L CROR E WAS RECEIVED BY THE APPELLANT AND IN THIS CASE THE DATE OF MATURITY WAS ALSO 18.2 .2011 AND LIKEWISE IN THE LAST CASE WHERE IN THE SECURITIES OF NHB BONDS, THE REDEMPTIO N AMOUNT OF RS 1,25,00,000/- ALONGWITH INTEREST OF RS.7,18,750/- WAS TRANSFERRED TO THE ACCOUNT OF THE APPELLANT ON 15.10.2010 BY THE NATIONAL HOUSING BANK (DATE OF M ATURITY 5.10.2010). SO IN LAST THREE SECURITIES, PAYMENTS TOWARDS SALE PROCEEDS HAVE BEEN RECEIVED BY THE APPELLANT IN THE YEAR UNDER CONSIDERATION ON THE DU E DATE OF MATURITIES AND HENCE THE APPELLANT HAS REALIZED THE ACTUAL LOSSES ON MATURIT Y OF THESE SECURITIES AND THE QUESTION OF HAVING ANY NOTIONAL LOSSES AS HELD BY T HE A.O. IS NOT CORRECT AND JUSTIFIED. IN THE CASE OF IIBI SECURITY, THE SAME WAS PRE-REDE EMED BY IIBI ITSELF IN THE YEAR UNDER CONSIDERATION AND THUS ACTUAL LOSSES HAVE BEE N INCURRED IN THE YEAR UNDER CONSIDERATION. THUS THE AO'S ACTION FOR THE DISALLO WANCES OF THE NOTIONAL LOSSES SO HELD IS NOT CORRECT AND THEREFORE SUCH DISALLOWANCE MADE IS DELETED. THUS, THE GROUND OF THE APPELLANT IS ALLOWED. 6. WE FIND THAT THE AO HIMSELF HAS ADMITTED THE FAC T THAT THE GOVERNMENT SECURITIES/BONDS HAVE BEEN ACTUALLY SOLD ON VARIOUS DATES FALLING WITHIN THE FINANCIAL YEAR RELEVANT TO ASSES SMENT YEAR IN QUESTION. THE ASSESSEE HAS ALSO ADDUCED EVIDENCES OF ACTUAL SALE. THIS BEING SO, WE DO NOT SEE ANY REASON TO INTERFERE WI TH THE DETAILED REASONS OF THE CIT(A) AND CONCLUSION THEREON. WE FIND OURS ELVES IN COMPLETE AGREEMENT WITH THE ORDER OF THE CIT(A) REPRODUCED H EREINABOVE AND THEREFORE DO NOT INTEND TO RESTATE THE SAME. WE AL SO GATHER IMPRESSION FROM THE GROUNDS OF APPEAL OF THE REVENUE THAT THE ONLY GRIEVANCE OF THE REVENUE IS GOVERNMENT SECURITIES/BONDS GIVING RISE TO THE LOSS OUGHT ITA NO.175/AHD/ 2015 DCIT VS. TEXTILE TRADERS CO-OP.BANK LTD. ASST.YEAR 2011-12 - 9 - NOT TO HAVE BEEN SOLD PRIOR TO THE DATE OF MATURITY TO ENABLE THE ASSESSEE TO CLAIM THE BUSINESS LOSS. WE DO NOT SEE ANY JUST IFICATION WHATSOEVER FOR SUCH VIEW. WE THUS DO NOT FIND ANY SEMBLANCE O F MERITS IN THE APPEAL OF THE REVENUE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20 / 12 /2017 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 20/ 12 /2017 4..+,.+../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-XX, AHMEDABAD 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD