The Ratnakar Bank Ltd, Kolhapur V. Additional Comm. of Income-tax, Kolhapur

ITA 789/PUN/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1957 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Capital asset; Business income; Depreciation; Cost of acquisition; Revenue expenditure
• Section: 143(3)

Judgement Text

ITA NO.789/PN/2010 THE RATNAKAR BANK LTD., KOLHAPUR IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE: SHRI R.S. PADVEKAR , JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 789 / P N / 20 10 ASSESSMENT YEAR : 2006 - 07 THE RATNAKAR BANK LTD. KOLHAPUR VS. ACIT , RANGE - 2 KOLHAPUR (APPELLANT) (RESPONDENT) PAN NO. AABCT 3335M APPELLANT BY: SHRI SUN I L PATHAK RESPONDENT BY: SHRI MUKESH VERMA DATE OF HEARING : 01.01.2013 DATE OF PRONOUNCEMENT : 08 .02.2013 ORDER PER R.S. PADVEKAR:- THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A) KOLHAPUR DATED 11.02.2010 FOR THE AS SESSMENT YEAR 2006-07. THE ASSESSEE HAS TAKEN THE MULTIPLE GROUNDS BUT THE SOLITARY ISSUE WHETHER THE A.O. IS JUSTIFIED IN REJECTING THE CLAIM OF THE ASS ESSEE OF RS.3,19,09,056/- ON ACCOUNT OF AMORTIZATION IN THE VALUE OF GOVERNMENT SECURITIES HELD AS A `STOCK IN TRADE UNDER HTM CATEGORY. 2. THE ASSESSEE IS A SCHEDULED BANK HAVING ITS REGI STERED OFFICE AT KOLHAPUR. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y . 2006-07, WHICH WAS SELECTED FOR SCRUTINY AND ASSESSMENT HAS BEEN COMPLETED U/S 143(3) OF THE ACT. IT WAS NOTICED BY THE A.O. THAT PROVISION WAS MADE TOWARDS DEPRECIATION IN INVESTMENT OF RS.5,86,32,719/-. THE A.O. SOUGHT THE EXPLANATI ON OF THE ASSESSEE FOR NON- INCLUSION OF THE SAID PROVISION IN INCOME COMPUTATI ON. THE A.O. FILED THE DETAILS OF THE PROVISION IN RESPECT OF DEPRECIATION IN INVE STMENT WHICH IS REPRODUCED ON PAGE NO.3 OF THE ASSESSMENT ORDER. THE A.O. ASKED THE ASSESSEE TO FURNISH FULL PARTICULARS OF THE SECURITIES CONVERTED FROM AFS (A VAILABLE FOR SALE) CATEGORY TO HTM (HELD TO MATURITY) CATEGORY AS WELL AS THE DETA ILS OF THE EXPENSES AMORTIZED. THE ASSESSEE FILED THE DETAILS OF DEPRE CIATION ON SECURITIES WHICH WAS TO THE EXTENT OF RS.3,43,43,740/- AS UNDER. THE SA ID AMOUNT WAS IN RESPECT OF AFS AND A.O. ACCEPTED THE SAME: SL.NO. SECURITY FACE VALUE BOOK VALUE MARKET VALUE AS ON 25.05.05 DEPRECIATION AS ON SHIFTING DATE 1 7.40% G.S. 2012 10.00 11.56 10.28 1.28 2 7.37% G.S . 2014 5.00 5.89 5.13 0.76 3 7.27% G.S. 2013 10.00 11.63 10.23 1.40 TOTAL 29.08 25.64 3.44 2 ITA NO.789/PN/2010 THE RATNAKAR BANK LTD., KOLHAPUR 2 3. THE ASSESSEE STATED THAT AS PER THE RBI GUIDELIN ES, THE SHIFTING OF SECURITIES FROM AFS TO HTM HAS TO BE DONE AT THE AC QUISITION COST/BOOK VALUE/MARKET VALUE ON THE DATE OF TRANSFER, WHICHEV ER IS LEAST AND THE DEPRECIATION, IF ANY HAS TO BE PROVIDED. THE ASSES SEE ALSO CONTENDED THAT SECURITIES ON WHICH DEPRECIATION ON RS.3.43 CRORES WAS PROVIDED HAVE BEEN SOLD DURING THE SAME FINANCIAL YEAR AND BANK HAS BOOKED A TRADING PROFIT OF RS.9 LAKHS. THE ASSESSEE ALSO FILED THE WORKING WHICH I S AS UNDER: SL.NO. PARTICULARS WITH PROVISION OF DEPRECIATION WITHOUT PROVISION OF DEPRECIATION A BOOK VALUE 29.08 29.08 B LESS: DEPRECIATION 3.44 0 C LESS: AMORTIZATION 0.02 0.02 25.62 29.06 D SALE VALUE 25.71 25.71 E PROFIT (LOSS) 0.09 (3.35) NET DEBIT TO P/L ACCOUNT (B+C-E) 3.37 3.37 4. IN RESPECT OF AMOUNT OF AMORTIZATION OF RS.3,19, 09,056/-, THE ASSESSEE CONTENDED THAT TOTAL AMORTIZATION OF THE SAID AMOUN T WAS REQUIRED TO BE PROVIDED DURING THE YEAR AS PER RBI NORMS. THE A.O . HAS RESERVATION FOR ALLOWING THE SAID DEDUCTION TO THE ASSESSEE AS IN H IS OPINION, THE SECURITIES HELD IN HTM ARE IN THE NATURE OF THE INVESTMENT. HE FUR THER OBSERVED THAT THE INSTRUCTIONS ISSUED BY THE RBI DO NOT SUPERSEDE THE PROVISIONS OF THE I.T. ACT. IN THE OPINION OF THE A.O., PROVISION IN RESPECT OF DE PRECIATION WAS SOMETHING WHICH WAS PUTTING ASIDE THE MONEY FOR AN EVENT WHIC H IS TO HAPPEN IN FUTURE OR CLAIMED ANY DEDUCTION FOR CONTINGENT LIABILITIES. HE ALSO REPORTED TO THE DECISION OF SHRI SAJJAN MILLS LTD. 156 ITR 585 AND MAHADEV G ANGAPRASAD 61 ITR 384 (BOM.), IN WHICH IT IS HELD THAT THE CONTINGENT LIA BILITIES DO NOT CONSTITUTE EXPENDITURE AND HENCE EVEN UNDER THE MERCANTILE SYS TEM OF ACCOUNTING, THE DEDUCTION IN THE NATURE OF THE CONTINGENT LIABILITY OR PROVISION CANNOT BE ALLOWED. HE THEREFORE DISALLOWED RS.3,19,09,056/-, TREATING THE SAME AS A CONTINGENT IN NATURE AS HE DID NOT AGREE WITH THE ASSESSEE THAT A T THE TIME OF SHIFTING OF THE SECURITIES FROM AFS TO HTM CATEGORIES, THE VALUATIO N TO BE DONE AT THE MARKET RATE AND LOSS AS DEPRECIATION IS TO BE PROVIDED. 5. THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD. CI T(A) BUT WITHOUT SUCCESS. THE LD. CIT(A) DECIDED THE ISSUE AGAINST THE ASSESS EE AND CONFIRMED THE ASSESSING OFFICERS STAND ON THE SAID ISSUE AND HEL D AS UNDER: THE SUBMISSIONS OF APPELLANT HAVE BEEN CONSIDERED. AS PER THE RBI GUIDELINES, INVESTMENT CLASSIFIED UNDER HELD TO MA TURITY CATEGORY NEED NOT BE MARKED TO MARKET. THEY ARE REQUIRED TO BE CARRIED AT ACQUISITION COST UNLESS IT IS MORE THAN THE FACE VALUE IN WHICH CASE THE PREMIUM SHOULD BE AMORTISED OVER THE PERIOD REMAINING TO MATURITY. THEREFORE, THE M ARKET PRICE HAS NOTHING TO DO WITH VALUATION OF SECURITIES. THE DEPRECIATION IS ALLOWABLE ONLY ON THOSE 3 ITA NO.789/PN/2010 THE RATNAKAR BANK LTD., KOLHAPUR 3 INVESTMENTS WHICH ARE ALLOWED TO BE MARKED TO MARKE T BY RBI AND NOT ON ALL INVESTMENTS I.E. NOT ALLOWABLE ON PERMANENT INVESTM ENTS (HTM SECURITIES). SINCE IT IS ADMITTED THAT THESE ARE PERMANENT ASSET S, ANY EXPENDITURE INCURRED ON THESE SECURITIES IS CAPITAL IN NATURE AND CANNOT BE CLAIMED AS REVENUE EXPENDITURE. IN THE DECISION RELIED ON BY THE APPE LLANT I.E. CIT VS. NIDUNGADI BANK LTD., 264 ITR 545 (KERALA), THE ASSESSMENT YEA RS INVOLVED WERE UPTO 1992- 93 AND THE ISSUE WAS DEDUCTION FOR DEPRECIATION IN VALUE OF SECURITIES HELD BY BANKS AS STOCK-IN-TRADE AND NOTIONAL LOSS CLAIMED B Y THE ASSESSEE BANK ON VALUATION OF SUCH SECURITIES AT THE CLOSE OF THE YE AR WAS ALLOWABLE AS DEDUCTION IN COMPUTING THE TAXABLE PROFITS. THIS DECISION WA S RENDERED BY RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF UC O BANK VS. CIT. HOWEVER, FROM ASST. YEAR 1993-94 ONWARDS, CBDT ISSUED A CIRC ULAR NO.665 ON 5.10.1993 WHEREIN IT WAS MENTIONED THAT THE A.O. HAS TO DETER MINE WHETHER ANY PARTICULAR SECURITY CONSTITUTE STOCK IN TRADE OR INVESTMENT AS PER THE GUIDELINES ISSUED BY RBI FROM TIME TO TIME. RBI VIDE CIRCULAR DATED 16. 10.2000 REVISED THE GUIDELINES AND INVESTMENT CLASSIFIED UNDER HTM NEED NOT BE MAR KED TO MARKET AND ONLY ALLOWED RE-VALUATION IN RESPECT OF SECURITIES UNDER HTC AND AFS CATEGORIES. THEREFORE, THE TREATMENT GIVEN BY THE APPELLANT IN RESPECT OF INVESTMENTS (HTM CATEGORY) IS NOT CORRECT AND THE DEDUCTION CANNOT B E ALLOWED AS THEY ARE ON ACCOUNT OF INVESTMENTS AND NOT ON STOCK-IN-TRADE. ANY LOSS OR GAIN HAS TO BE WORKED OUT ONLY AT THE TIME OF REDEMPTION. THEREFO RE, A.O.S ACTION CANNOT BE FOUND FAULT WITH. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORD. THE LD. COUNSEL ARGUED THAT AS PER THE CON SISTENT METHOD FOLLOWED BY THE ASSESSEE, BANK SECURITIES ARE VALUED AT COST OR MARKET VALUE. HE FURTHER ARGUED THAT IF THE SECURITIES HELD UNDER AFS ARE TR ANSFERRED TO THE HTM, THEN THE VALUATION IS TO BE DONE ON THE DATE OF TRANSFER AND IF THE MARKET VALUE IS LESS THAN THE COST OF THE SECURITIES THEN THE SAME IS PR OVIDED AS A DEPRECIATION. HE VEHEMENTLY ARGUED THAT THE GUIDELINES ISSUED BY THE RBI ARE BINDING ON THE BANK UNDER THE BANKING REGULATION ACT AND ASSESSEE IS MAKING THE PROVISION OF AMORTIZATION IS MADE TILL THE YEAR OR DATE OF MATUR ITY OF THE SAID SECURITY. THE LD. COUNSEL PLACED HIS RELIANCE ON THE DECISION OF HON'BLE HIGH COURT OF KERALA IN THE CASE OF NIDUNGADI BANK 264 ITR 545. HE ALSO PL ACED HIS RELIANCE ON THE FOLLOWING DECISIONS OF THE KARNATAKA BENCHES STATE BANK OF MYSORE VS. DCIT (2009) 33 SOT 7 (BANG)., LATUR URBAN CO-OPERATIVE B ANK LTD. VS. DCIT 778 & 792/PN/2011 DATED 31.8.2012. WE HAVE ALSO HEARD TH E LD. D.R. 7. THE ISSUE IN CONTROVERSY BEFORE US IS IN NARROW PASS. THE ASSESSEE IS A BANK AND ENGAGED INTO THE BANKING BUSINESS. THE AS SESSEE MADE THE CLASSIFICATION OF THE SECURITIES IN COMPLIANCE WITH THE GUIDELINES OF THE RBI I.E. (1) HELD TO MATURITY (HTM) (2) AVAILABLE FOR SALE ( AFS) AND (3) HELD FOR TREATING (HFT). IN THE CASE OF NIDUNGADI BANK LTD. (SUPRA), THE HON'BLE HIGH COURT OF KERALA HELD THAT ALL THE INVESTMENTS ARE IN THE NAT URE OF STOCK IN TRADE HELD BY THE ASSESSEE. SO FAR AS ISSUE BEFORE US IS CONCERN ED, IT IS ONLY THE CONVERSION OF THE CLASSIFICATION OF THE SECURITY BY THE BANK. IT IS NOT DISPUTED IN THIS CASE THAT 4 ITA NO.789/PN/2010 THE RATNAKAR BANK LTD., KOLHAPUR 4 ASSESSEE IS CONSISTENTLY FOLLOWING THE SAID METHOD AND EVEN IF THE SECURITIES ARE SOLD, FINALLY THE DEPRECIATION/LOSS WILL HAVE THE B EARING WHILE DETERMINING THE PROFIT OR LOSSES WHEN THE SECURITIES ARE SOLD IN TH E OPEN MARKET. THE IDENTICAL ISSUE HAD COME BEFORE THE ITAT BANGALORE BENCH IN T HE CASE OF STATE BANK OF MYSORE (SUPRA) AND TRIBUNAL HELD AS UNDER: 7.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HA VE ALSO PERUSED THE RBI MASTER CIRCULAR AND OTHER CASE LAWS ON WHIC H THE SENIOR COUNSEL HAS PLACED STRONG RELIANCE. THE HON'BLE TRIBUNAL, BANGALORE BENCH 'B' IN ITA NO. 253/BANG/2007, DT. 24TH JAN., 2008 IN THE C ASE OF ASSTT. CIT (LTU) VS. VIJAYA BANK HAD AN OCCASION TO DEAL WITH A SIMILAR ISSUE. AFTER CONSIDERING THE RIVAL SUBMISSIONS, ANALYZING THE RB I GUIDELINES AND ALSO EXTENSIVELY QUOTING VARIOUS JUDICIAL PRONOUNCEMENTS ON WHICH BOTH THE PARTIES HAVE PLACED THEIR RELIANCE, THE HON'BLE TRI BUNAL HAS OBSERVED THUS '15. FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE IS TREATING THE SECURITIES HELD UNDER THE CATEGORY 'HELD FOR MATURITY' AS STOC K-IN-TRADE. IF THERE IS APPRECIATION IN THE MARKET VALUE AS COMPARED TO THE MARKET VALUE AT THE OPENING OF THE YEAR AND SUCH APPRECIATION IS ALSO A CCOUNTED FOR. IT IS NOT CLAIMING DEPRECIATION ONLY FOR THE YEARS, WHEN THE VALUE HAS GONE DOWN. IF THAT HAD BEEN THE CASE, THE ASSESSEE WOULD NOT HAVE ACCOUNTED FOR ANY APPRECIATION IN 3RD, 4TH AND 5TH YEAR. THE METHOD BY WHICH THE ASSESSEE BANK IS VALUING SECURITIES IS IN ACCORDANC E WITH THE ACCOUNTING PRINCIPLES BY TREATING SUCH SECURITIES AS STOCK-IN- TRADE. MOREOVER, THE REVENUE ITSELF IS TREATING THE PROFIT ON MATURITY O F SUCH SECURITY AS BUSINESS INCOME AND, THEREFORE, SUCH SECURITIES CAN NOT BE TREATED AS CAPITAL ASSETS. 16. SPECIAL BENCH, DELHI IN THE CASE OF NEW INDIA I NDUSTRIES LTD. VS. ASSTT. CIT (2007) 112 TTJ (DEL) (SB) 917 : (2008) 1 DTR (D EL)(SB)(TRIB) 247 : (2007) 18 SOT 51 (DEL)(SB) : 2007-TIOL-389-ITAT-DEL -SB HAD AN OCCASION TO CONSIDER THE BINDING NATURE OF RBI GUIDELINES. T HE SPECIAL BENCH HELD THAT RBI GUIDELINES IN RESPECT OF PROVISION FOR NPA ARE NOT BINDING IN THE COMPUTATION OF INCOME UNDER THE IT ACT. INCOME IS T O BE ASSESSED AS PER THE PROVISION OF THE IT ACT. THE MADRAS HIGH COURT IN THE CASE OF T.N. POWER FINANCE & INFRASTRUCTURE DEVELOPMENT CORPORAT ION LTD. VS. CIT (2007) 213 CTR (MAD) 610 : (2006) 280 ITR 491 (MAD) : (2006-TIOL- 112-HC-MAD-IT HELD THAT PROVISION FOR NON-PERFORMIN G THE ASSETS DEBITED TO P&L A/C IS NOT ALLOWABLE, AS DIRECTIVE OF RBI MA Y NOT OVERRIDE STATUTORY PROVISION. ONCE THE REVENUE IS ACCEPTING THAT PROFI T ARISING ON THE MATURITY OF INVESTMENT IS BUSINESS INCOME, THEN IT CANNOT TA KE THE STAND THAT IT IS NOT STOCK-IN-TRADE. DURING THE COURSE OF PROCEEDING S BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE HAS FILED THE ASS ESSMENT ORDER IN THE CASE OF THE ASSESSEE FOR THE ASST. YRS. 2000-01 TO 2002-03. THE DEPRECIATION CLAIMED IN ALL THESE ASST. YEARS HAS N OT BEEN DISALLOWED .THUS, THE REVENUE IS CONSISTENTLY ACCEPTING THAT DEPRECIA TION IS ALLOWABLE. THIS BENCH IN THE FOLLOWING CASES HAS ALLOWED SUCH DEPRE CIATION ON THE VALUATION OF THE SECURITIES HELD BY THE BANK : (1) KARNATAKA BANK LTD. VS. JT. CIT ITA NO. 50/BANG /1997, DT. 27TH JULY, 2003; (2) ING VYSYA BANK LTD. VS. DY. CIT (2006) 6 SOT 60 6 (BANG). 17. CONSIDERING THE ABOVE DISCUSSION, IT IS HELD T HAT THE ASSESSEE IS ENTITLED TO VALUE ALL THE INVESTMENT AT COST PRICES OR MARKET VALUE WHICHEVER IS LOWER BY TREATING SUCH INVESTMENT AS STOCK-IN-TR ADE....' 7.3 THE HON'BLE TRIBUNAL IN ITA NO. 112/BANG/2008, DT. 3RD DEC., 2008 IN THE CASE OF CORPORATION BANK VS. ASSTT. CIT 2009-TIOL-75-ITAT- 5 ITA NO.789/PN/2010 THE RATNAKAR BANK LTD., KOLHAPUR 5 BANG, BY FOLLOWING THE DECISION OF THE HON'BLE TRIB UNAL IN THE CASE OF ASSTT. CIT (LTU) VS. VIJAYA BANK (SUPRA), HAS HELD THAT '16. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE BEFORE US AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF UNITED COMMERCIAL BANK VS. CIT REFERRED SUPRA, I T IS HELD THAT THE ASSESSEE BANK IS ENTITLED TO VALUE ALL THE INVESTME NT AT COST PRICES OR MARKET VALUE WHICHEVER IS LOWER BY TREATING SUCH ST OCK-IN-TRADE.........' 7.4 IN RBI'S MASTER CIRCULAR, UNDER THE CAPTION 2 CLASSIFICATION, IT HAS BEEN MENTIONED THUS '(I) THE ENTIRE INVESTMENT PORTFOLIO OF THE BANKS (INCLUDING SLR SECURITIES AND NON-SLR SECURITIES) SHOULD BE CLASSI FIED UNDER THREE CATEGORIES VIZ., 'HELD TO MATURITY', 'AVAILABLE FOR SALE' AND 'HELD FOR TRADING'. HOWEVER, IN THE BALANCE SHEET, THE INVEST MENTS WILL CONTINUE TO BE DISCLOSED AS PER THE EXISTING SIX CLASSIFICATIONS V IZ., (A) GOVERNMENT SECURITIES, (B) OTHER APPROVED SECURITIES, (C) SHAR ES, (D) DEBENTURES AND BONDS, (E) SUBSIDIARIES/JOINT VENTURES, AND (F) OTH ER (CP MUTUAL FUND UNITS, ETC.). (II) BANKS SHOULD DECIDE THE CATEGORY OF THE INVEST MENT AT THE TIME OF ACQUISITION AND THE DECISION SHOULD BE RECORDED ON THE INVESTMENT PROPOSALS. 2.3 SHIFTING AMONG CATEGORIES : (I) BANKS MAY SHIFT INVESTMENTS TO/FROM HELD TO MAT URITY CATEGORY WITH THE APPROVAL OF THE BOARD OF DIRECTORS ONCE A YEAR. SUCH SHIFTING WILL NORMALLY BE ALLOWED AT THE BEGINNING OF THE ACCOUNT ING YEAR. NO FURTHER SHIFTING TO/FROM THIS CATEGORY WILL BE ALLOWED DURI NG THE REMAINING PART OF THAT ACCOUNTING YEAR.' 7.5 IN VIEW OF THE CLEAR-CUT GUIDELINES OF THE RBI AND RESPECTFULLY FOLLOWING THE FINDINGS OF THE HON'BLE TRIBUNAL REFE RRED SUPRA, THE CLAIM OF THE ASSESSEE TOWARDS PROVISION OF DEPRECIATION OF R S. 1,27,21,17,913 ON ACCOUNT OF TRANSFER OF SECURITIES FROM AFS CATEGORY TO HTM CATEGORY IS ALLOWED. IT IS ORDERED ACCORDINGLY. 8. AS THE ISSUE IS DIRECTLY COVERED IN FAVOUR OF TH E ASSESSEE BY DECISION OF I.T.A.T. BANGALORE BENCH, WE DO NOT FIND ANY REASON TO TAKE THE DIFFERENT VIEW. WE ACCORDINGLY, ALLOW THE CLAIM OF THE ASSESSEE AND GROUNDS TAKEN BY THE ASSESSEE ARE ALLOWED. 9. THE ASSESSEE HAS ALSO FILED APPLICATION FOR ADMI SSION OF THE FOLLOWING ADDITIONAL GROUNDS: THE ASSESSEE SUBMITS THAT THE SECURITIES HELD UNDE R THE HEAD 'HELD TO MATURITY' (HTM) CATEGORY SHOULD HAVE BEEN VALUED AT COST OR MARKET VALUE WHICHEVER IS LOWER AND ACCORDINGLY, SINCE THE MARKET VALUE OF THE SAID SECURITIES AS ON 31 ST MARCH, 2006 WAS RS. 118.58 CRORES AS AGAINST THE BOOK VALUE OF RS. 124.89 CRORES, THE LO SS OF RS. 6.31 CRORES SHOULD HAVE BEEN ALLOWED AS A DEDUCTION WHILE COMPU TING THE TOTAL INCOME OF THE ASSESSEE COMPANY. 6 ITA NO.789/PN/2010 THE RATNAKAR BANK LTD., KOLHAPUR 6 THE APPELLANT ADMITS THAT THE ADDITIONAL GROUND RAI SED IS PURELY LEGAL IN NATURE AND AS ALL THE FACTS ARE ON RECORD, THE A SSESSEE REQUESTS FOR ADMISSION OF THE ABOVE GROUND. 10. THE LD. COUNSEL SUBMITS THAT THIS GROUND IS A L EGAL GROUND AND IT IS IN THE NATURE OF THE ALTERNATE PLEA. IF THE ASSESSEE DOES NOT SUCCEED ON THE MAIN GROUND, THUS THE ADDITIONAL GROUND MAY BE ADMITTED AND DECIDED. AS THE ASSESSEE HAS SUCCEEDED ON THE MAIN GROUND, THE ALTE RNATE PLEA BECOMES INFRUCTUOUS AND SAME IS ALSO NOT ADMITTED. 11. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 08.02.2013 SD/- SD/- ( R.K. PANDA ) ( R.S. PADV EKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS PUNE, DATED 08 TH FEBRUARY, 2013 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) , KOLHAPUR 4 THE CIT (CENTRAL), PUNE 5 THE DR, ITAT, PUNE . 6 GUARD FILE. BY ORDER