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TMI Blog1989 (7) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign currency was capital in nature and as such, the Commissioner of Income-tax was justified in invoking the provisions of section 263 of the Income-tax Act, 1961?" The questions suggested by the Revenue for the assessment year 1977-78 are as follows : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Commissioner of Income-tax had no jurisdiction to pass an order under section 263 of the Income-tax Act, 1961, after an order was passed by the Commissioner of Income-tax (Appeals) relating to the same assessment ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in setting aside the order of the Commissioner of Income-tax and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred appeals before the Tribunal and it was contended on behalf of the assessee that, in view of the principles laid down by the Supreme Court in the case of India Cements Ltd. [1966] 60 ITR 52, the order of the Tribunal for the assessment year 1974-75 needs reconsideration and that the judgment of this court in the case of Bestobell (India) Ltd. [1979] 117 ITR 789, should not be followed as the said judgment was delivered by this court before the Supreme Court delivered the judgment in the case of Sutlej Cotton Mills Ltd. [1979] 116 ITR 1, in which it has been observed that, if the borrowed money is held on capital account, the loss suffered on account of exchange difference should be capital but, if it is held on revenue account, the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en concluded against the Revenue by the order of the Tribunal's Special Bench at Bombay in the case of Dwarkadas and Co. (P.) Ltd., Bombay in I. T. A. No. 1852/(Bom) of 1977-78, wherein the Tribunal, after consideration of the decisions of the various courts has held that the Commissioner has no jurisdiction under section 263 to revise the order of the assessment as, after the order of the Appellate Assistant Commissioner/Commissioner of Income-tax (Appeals), the assessment order had ceased to exist. The Tribunal, therefore, set aside the order of the Commissioner of Income-tax (Appeals) for the assessment year 1976-77 on the legal issue and restored that of the Income-tax Officer. We shall first take up the questions which have been rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Finance Act, 1989, to clarify that the said Explanation must be deemed to have been always in existence. In this case, the loss was allowed as a revenue loss. The assessee did not prefer any appeal against such determination. Therefore, the appellate authority had no occasion to consider or decide whether the loss was rightly allowed or not. In our view, the question whether the loss arising out of devaluation is capital loss or revenue loss was not the subject-matter of the appeal before the appellate authority and, accordingly, the Commissioner of Income-tax had jurisdiction to revise the order of assessment. For the foregoing-reasons, both the questions raised at the instance of the Revenue are answered in the negative and in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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