R.K.AGRAWAL,J. - (1.) THE Income Tax Appellate Tribunal, Allahabad has referred the following two questions of law under Section 256(2) of the Income Tax Act, 1961, hereinafter referred to as 'the Act' for opinion to this Court 1. Whether, in law and on facts of the case, the I.T.A.T. has not exceeded its jurisdiction by omitting and allowing the miscellaneous application of the assessee when it amounted to revision of its own order which is not permissible in law, and which cannot be covered as a mistake apparent from record, which only can be rectified Under Section 256(2)?
(2.) WHETHER in law and on facts, the I.T.A.T. was correct in holding that the closing stock of free sugar as on 30 -6 -1978 should be valued at two different rates i.e. 42704 Qtls. should be valued at Rs. 85,58,293/ - being the amount realised on sale upto 30 -11 -1978 which is after the closing of the previous year and the balance from sugar of 28,789 Qtls. should be valued at Rs. 207.86 per qtls. which was the cost price as on 30 -6 -1978 and thus adopting an altogether new principle which has got no sanctity in law and in accountancy? 2. The present Reference relates to the Assessment Year 1979 -80. Briefly stated the facts giving rise to the present Reference are as follows:
(3.) THE assessee is a private limited company and derives income from manufacture and sale of sugar. The previous year of the assessee ended on 30th June, 1978. The only dispute in the case was regarding the valuation of closing stock of free sale sugar. The assessee was having the following stock as on 30th June, 1978: Levy Sugar .. 95,144 Qtls.Free Sugar .. 71,493 Otis.1,66,637 Otls. There was no dispute regarding the valuation of levy sugar but the assessee disputed that the valuation of free sale sugar weighing 42,704 quintals should be taken at the amount realised by the assessee till 30th November, 1978 and the balance quantity of 28,789 quintals should be valued @ Rs. 180/ - per quintal, which was the prevailing market rate as on 30th November, 1978, the date on which the balance sheet of the year under consideration was signed. The assessee was, however, valuing its closing stock from the Assessment year 1974 -75 to 1977 -78 at cost or market price whichever was lower, but during the year under consideration the assessee made a departure and valued the stock after considering the realisable value on the date of signing of the balance sheet i.e., 30th November, 1978 because of special circumstances during the year. It is admitted that the sugar price has been de -controlled on 17th August, 1978.;