I.P. Mukerji, J. - (1.) Itr No.7 of 2000 This is a reference application under Section 256(1) of the Income Tax Act, 1951.
(2.) The applicant/assessee wanted the following questions arising out of the order of the Income Tax Appellate Tribunal (hereinafter 'the tribunal') dated 27th March, 1998 in ITA 2362 (Cal) of 1995 in the assessment year 1990- 91 to be answered by this Court. "1. Whether on the facts and in the circumstances of the case the Tribunal was justified in law in holding that the assessee is not entitled to value the shares and securities which were held to be its stock in trade on the basis of the cost or market price whichever is lower as claimed in the return and the valuation of the closing stock was to be made on the cost basis as disclosed in the Balance Sheet and the profit or loss, if any, is to be determined on such basis? 2. Whether on the facts and in the circumstances of the case and in view of the directions of the C.I.T. (Appeals) that in regard to the purchase and sale of shares and securities made during the year and which are not out of the opening stock of shares and securities as on 1.1.84, the said shares and securities included in closing balance constituted the stock-in-trade of the banking business and the assessee will be entitled to change over to the present method of valuation of the closing stock at cost or market price whichever in lower and in view of the fact that there is no appeal preferred by the department against the said finding and direction, the Tribunal was justified in law in holding that the assessee cannot for the purpose of the Income Tax Return claim the valuation of the closing stock on the basis of cost or market price whichever is lower and the profit or loss cannot be computed on such method? 3. Whether on the facts and in the circumstances of the case and in view of the finding of the Tribunal that all the assessee during the relevant accounting period constituted its stock-in-hand, the Tribunal was justified in law in holding that the assessee claim in the Income Tax Return the valuation of its closing stock of shares & securities on the basis of the cost or market price whichever is lower and the profit & loss, if any, is to be computed on the basis of cost and not on the basis of valuation of the closing stock the cost of market price whichever is lower?"
(3.) By its referral order dated 23rd March, 1999 the tribunal referred only question No.2 to this Court. It gave the explanation that this question arose in the assessment year 1990-91. They were identical to the questions sought to be raised by the assessee bank in the assessment years 1985-86, 1986-87 and 1987-88. For some reason, the questions raised in this reference for the assessment year 1990-91 could not be included in the statement of case from 1985-86 to 1987-88. Since, for those assessment years only question No.2 was referred to this court on reference, an identical reference ie. of question No.2 was made to this court for the assessment year 1990-91. The Tribunal stated that its statement of case in the referral Order dated 29th January 1999 for the said earlier assessment years be treated as a statement of case for the subject assessment year 1990-91.;