TMI Blog2002 (5) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in the case of UCO Bank v. CIT [1999] 240 ITR 355 has held as under: 2.2 Where the assessee-bank has been valuing its stock-in-trade (investments) "at cost in the balance sheet but it had been valuing the same investments "at cost" or market value, whichever is lower for income-tax purposes for over 30 years the same could not be discarded by the Revenue on the ground that assessee was maintaining balance sheet in the statutory form on the basis of the cost of the investments. 2.3 For valuing the closing stock, it is open to the assessee to value it at the cost or market value, whichever is lower; a method of accounting adopted by the taxpayer consistently and regularly cannot be discarded by the Departmental authorities on the view that the assessees have adopted a different method of keeping accounts or of valuation. Decision in favour of assessee. 2.4 Therefore, the Hon'ble Supreme Court decision has pronounced that even the valuation of stock-in-trade for Income-tax purposes, though not adopted in books of account is allowable as business loss. This is the identical case of the case. 3. That in the case of this Bank the Assessing Officer in para 4 of the O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or market price whichever is lower was not accepted by ITAT on the basis of Calcutta High Court in UCO Banks case, which has been reversed by the Hon'ble Supreme Court in UCO Banks case. 5.1 Hence, the order pronounced by Hon'ble Supreme Court is the correct legal position. Hence, a mistake occurred in any of the complete assessment is a mistake of law and which deserves to be corrected under section 254 of Income-tax Act, 1961. 6. That the order passed by ITAT Jaipur Bench, Jaipur dated 7-1-1998 suffered from mistake of law which is rectifiable under section 254 of the Income-tax Act. 7. At the time of passing order on 7-1-1998, the judgment of the Hon'ble Supreme Court in the case of UCO Bank was not available as the judgment was delivered by the Hon'ble Supreme Court on 29th September, 1999. Whether the subsequent judgment of the Hon'ble Supreme Court would constitute a mistake apparent from record. The Ld. A.R. relied upon the following judgments:- 7.1 That the Kerala High Court in the case of Kit Kotagiri Tea Coffee Estates Co. Ltd. v. ITAT [1988] 174 ITR 579 has held that a decision rendered by the Tribunal on the basis of a decision of the High Court, which is subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal, Co chin Bench in the case of His Highness Sir Rama Varma v. ITO [1982] 2 ITD 491 has held that being a highest court of land, the decision of the Supreme Court amounts to declaration of law as contemplated by Article 141 of the Constitution and such a declaration has retrospective effect since the law so declared' is the law applicable not only at the time of pronouncement of judgment but from the very inception. Hence, if the order is inconsistent with the true legal position as subsequently declared, the order is bad at its inception and amounts to an apparent mistake, for it is the law that is so declared which must be held to have in force at the time the order sought to be rectified was passed. The Supreme Court's decision in this case had rendered the Tribunal's decision erroneous and the error of law was patent and did not require any elucidation or debate. The error would, therefore, require to be rectified by amending the order and ultimately held that on the subsequent decision of the Hon'ble Supreme Court, there is mistake apparent from the record which is rectifiable under section 254(2) of the Income-tax Act 1961. 7.5 That the Hon'ble Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der:-- "...We are of the opinion that investment in government securities cannot be held as stock in trade it is definitely long term investment and, therefore, would arise only when this type of asset is finally transferred, sold or discarded, It cannot be revalued at the time of closing of each accounting period, Investments are always valued on the basis of cost profit. Under the circumstances, we do not find any infirmity in the order passed by the CIT(A)," 9. Now we find that this order of the Hon'ble Calcutta High Court had been reversed by the Hon'ble Supreme Court in UCO Bank's case and it was held as under:- "From the form of the prescribed balance sheet under the Banking Regulation Act it was evident that scheduled nationalised banks were directed to put the value of shares and securities at cost and if the market value was lower, it was to be shown separately in brackets. Preparation of the balance-sheet in accordance with the statutory provision would not disentitle the assessee in submitting income-tax return on the real taxable income in accordance with a method of accounting adopted by the assessee consistently and regularly, That could not be discarded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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