JUDGMENT

Nanavati, J.-Leave granted. Heard learned counsel on both the sides.

2. This appeal arises out of the judgment and order passed by the High Court of Karnataka on 6th June, 1995 in I.T.R.C. No. 26/93. The question that was referred to the High Court was :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the word `record used in Section 263(1) of the Act would not mean the record as it stands at the time of examination by the Commissioner, but it means the record as it stands at the time the order in question was passed by the ITO?"

3. The respondent-firm, during the previous year relevant to the assessment year 1977-78, had constructed a cinema theatre and in the return filed by it had shown the cost of construction at Rs. 20,28,498/- (Rs. 23,78,242 less Rs. 3,49,644 being electric portion). The Income-Tax Officer on 2nd February, 1980 wrote to the Departmental Valuation Officer to ascertain and report correct cost of construction of the theatre. The Valuation Officer expressed his inability to give his valuation report by 31st March, 1980 by which date the assessment was to be completed. The Income-Tax Officer