1. This appeal under Section 260-A of the Income Tax Act, 1961 (‘the Act’ for short) is by the Revenue, questioning the correctness of the order dated 10th March 2005 passed by the Income Tax Appellate Tribunal, Bangalore Bench in ITA No.382 (Bang)/1997.

2. In this Appeal, the Revenue has urged many questions of law for our consideration and in terms of the order dated 21-8-2006, while admitting the appeal, the following questions of law had been framed for examination as arising out of the order of the Tribunal:

(1) Whether, the Tribunal was correct in holding that in proceeding to hold that loss of Rs.1,09,10,252/-on revaluation of security in an allowable deduction.?

(2) Whether, the Tribunal was correct in holding that the conclusion drawn by the Assessing Officer that the securities held by the assessee were Government Security and as per RBI introduction they had to be held for a period of more than 10-15 years as permanent assets which would assume the character of a capital asset over which the question of allowing law an account of revaluation of capital assets did not arise?

(3) Whether, the Tribunal was correct in holding that the Assessing Officer had correct