TMI Blog2002 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... of law referred to us, we remit the matter back to the Tribunal and the Tribunal is directed to consider the questions afresh in accordance with law - - - - - Dated:- 19-12-2002 - Judge(s) : N. V. BALASUBRAMANIAN., K. RAVIRAJA PANDIAN. JUDGMENT The judgment of the court was delivered by N. V. BALASUBRAMANIAN J.-At the instance of the Revenue, the following two questions of law have been referred to this court by the Income-tax Appellate Tribunal, Chennai, for our opinion under section 256(1) of the Income-tax Act, 1961: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in cancelling the order passed under section 263 of the Income-tax Act? 2. Whether, on the facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the interest of the Revenue. The assessee preferred an appeal before the Income-tax Appellate Tribunal as against the order of the Commissioner of Income-tax. The Appellate Tribunal set aside the order passed by the Commissioner of Income-tax under section 263 of the Act on the ground that the provision for the entire claim of Rs. 14,27,799 was not made by the assessee due to non-availability of funds and it also held that the assessee was entitled to the revenue deduction in respect of the said deficiency in the valuation of the securities. The Tribunal also held that the method of valuing the Government securities adopted by the assessee at market value or cost, which was lower, had all along been accepted by the Department and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal, however, proceeded on the basis that the assessee had valued the Government securities at market value and the Commissioner of Income-tax did not dispute the fact of the assessee had valued the assets at the market value. We find that this view of the Appellate Tribunal is incorrect as the Commissioner has found that the assessee had not valued the investments at the end of the accounting year either at -cost or at the market value, but changed the method of valuation, which represented neither the market value nor the book value of the investments. The Tribunal therefore proceeded on the assumption that the Commissioner did not question the right of the assessee to value the investment as the order of the Commissioner shows that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt that the price paid for the purchase of the securities was in the nature of capital outlay. However, we are not expressing any opinion on the second question, as we are of the view that the Tribunal should consider the factual issue whether the assessee has valued the investment at cost price or market price, and whether the assessee is entitled to the deduction in respect of the deficiency in valuing the securities and if the assessee is entitled to the deduction, whether the assessee is entitled to deduction of the entire deficiency though the provision in the account had been made for a sum of Rs. 1,00,000. Hence, without answering the question of law referred to us, we remit the matter back to the Tribunal and the Tribunal is direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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