percentage of reserve, they are permitted to buy and sell such securities, irrespective of their categorisation. There is no embargo on the Bank to hold security in SLR up to the maturity date of the security. It was submitted that Banks always treat interest income from all securities as profit or loss, irrespective of the categorisation of investments. The interest on securities held by Banks is always taxed under the head “income from business or profession”. This contention is raised by HDFC Bank. It was submitted that in accordance with the well­settled and accepted method of accounting, the amount of broken period of interest Civil Appeal No.3291­3294 of 2009, etc. Page 10 of 45which is debited in the profit and loss account of the Bank is claimed as a deduction while computing the income from business under the head “income from business and profession” as the entire interest income is offered to tax under the said head. h. Reliance was placed on the RBI Circular dated 1st July