Bank securities valuation, reassessment jurisdiction, and bad debt write-off principles shape the Tribunal's mixed treatment of appeal grounds.

Reassessment initiated after four years was treated as requiring proper adjudication of the assessee's jurisdictional objection, and the matter was restored because the first appellate authority had not decided that challenge. Bank securities consistently valued at cost or market value, whichever is lower, were held eligible for that method regardless of whether they were classified as permanent or current, so depreciation was allowed. On the same valuation principle, appreciation on revaluation was brought to tax, while a bad debt claim was allowed where there was an actual write-off in substance and the technical objection failed. Grounds lacking Committee on Disputes clearance were excluded from appeal.

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Issues: (i) whether reassessment could be sustained where the original assessment had been completed under section 143(3) and the first appellate authority had not adjudicated the assessee's jurisdictional ground; (ii) whether depreciation on securities held by a bank had to be allowed on valuation at cost or market value, whichever is lower, including securities described as permanent and current; (iii) whether appreciation on revaluation of securities had to be brought to tax when depreciation losses on the same method were allowed; (iv) whether a bad debt claim rejected as a technical write off was allowable; (v) whether issues for which Committee on Disputes permission had been refused could still be pursued in appeal.

Issue (i): whether reassessment could be sustained where the original assessment had been completed under section 143(3) and the first appellate authority had not adjudicated the assessee's jurisdictional ground

Analysis: The reassessment was initiated after four years from the end of the relevant assessment year. The jurisdictional objection raised before the first appellate authority had not been decided at all. Since the omission went to the root of the reassessment jurisdiction, the proper course was for the first appellate authority to adjudicate the ground in the first instance. A reassessment founded only on a subsequent decision and without adjudication of the jurisdictional challenge was not treated as fit for direct disposal by the Tribunal in the absence of the lower appellate finding.

Conclusion: The issue was restored for adjudication and the reassessment challenge was decided in favour of the assessee for statistical purposes.

Issue (ii): whether depreciation on securities held by a bank had to be allowed on valuation at cost or market value, whichever is lower, including securities described as permanent and current

Analysis: The Tribunal accepted that bank investments, consistently valued on the basis of cost or market value whichever is lower, could not be denied merely because the portfolio was split into permanent and current categories. The consistent judicial view treated bank securities as eligible for such valuation, and the distinction introduced by the first appellate authority was held unwarranted. The assessee's method of valuation was therefore accepted as a proper reflection of income.

Conclusion: Depreciation on securities was allowed in favour of the assessee.

Issue (iii): whether appreciation on revaluation of securities had to be brought to tax when depreciation losses on the same method were allowed

Analysis: Once the securities were held capable of valuation at cost or market value whichever is lower, any decrease in value would reduce taxable profits and any increase in value would correspondingly enhance taxable profits. The same valuation principle necessarily applied in both directions.

Conclusion: The addition on appreciation of securities was sustained against the assessee.

Issue (iv): whether a bad debt claim rejected as a technical write off was allowable

Analysis: The claim was examined in the light of the settled principle that a debt need not be closed in each individual account if the books and balance sheet reflect an actual write off in the manner recognised by law. The governing authority accepted that the statutory requirement was satisfied when the debt was removed from the asset side in substance, and the technical objection was not enough to deny deduction.

Conclusion: The bad debt claim was allowed in favour of the assessee.

Issue (v): whether issues for which Committee on Disputes permission had been refused could still be pursued in appeal

Analysis: The Tribunal held that its recall jurisdiction was confined to the issues specifically remitted and to matters for which clearance had been obtained. A later decision ending the Committee on Disputes mechanism did not nullify earlier refusals already communicated during the period when the mechanism was operative. Issues specifically denied clearance therefore could not be entertained in the recalled appeals.

Conclusion: The affected grounds were dismissed and could not be pursued.

Final Conclusion: The recalled appeals were disposed of with mixed results: reassessment challenges were restored or set aside as applicable, depreciation on securities and bad debt claims were allowed, appreciation additions were sustained, and matters lacking Committee on Disputes clearance were excluded.

Ratio Decidendi: A bank's securities, when consistently valued on the basis of cost or market value whichever is lower, cannot be denied that valuation merely because of internal categorisation, and a reassessment after four years based solely on a subsequent precedent or without proper adjudication of the jurisdictional objection is unsustainable.

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