Reassessment scope on appellate remand may be limited to hedging losses, leaving settled trading loss computation untouched.

In reassessment after an appellate remand, the enquiry may be confined to the specific issue actually in dispute, here the character of alleged speculation or hedging losses. Where the original assessment had already examined and accepted the trading accounts and computed the trading loss, that settled computation should not be reopened merely because a later remand directed further examination of a limited loss claim. The appellate authority may set aside an assessment and direct further enquiry, but that power must be exercised judiciously and within the scope of the remand. The Tribunal's wider power under section 33(4) supports confining the enquiry to the subject matter truly at issue, leaving the concluded trading loss computation undisturbed.

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Issues: Whether, in reassessment proceedings following an appellate remand, the scope of enquiry could be restricted to the speculation or hedging losses and the concluded trading loss computation could be kept outside the reopening.

Analysis: The original assessment had already scrutinised and accepted the trading accounts and determined the trading loss. The later remand arose only because the assessee claimed that certain losses were hedging losses and required examination. The appellate authority's further direction, by which the whole assessment and the correctness of the trading and manufacturing results were reopened, went beyond what was necessary for the limited enquiry. The Tribunal held that although the appellate authority had jurisdiction to set aside the assessment and direct further enquiry, that power had to be exercised judiciously and, on the facts, there was no basis for reopening the settled trading loss issue. The wider power under section 33(4) was available to the Tribunal to confine the enquiry to the subject matter actually in dispute.

Conclusion: The restriction of the reassessment enquiry to the speculation or hedging losses was justified, and the concluded trading loss computation could not be reopened; the finding was in favour of the assessee.

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