RAMANUJAM J.

At the instance of the Revenue, the following questions have been referred by the Income-tax Appellate Tribunal to this court for its opinion, respectively, in relation to the years 1968-69 and 1969-70, in relation to the same assessee :

Assessment year 1968-69 :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee is entitled to the deduction of Rs. 9, 20, 125 being provision against profit on exchange ?"

Assessment year 1969-70 :

" Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee is entitled to deduction of Rs. 4, 32, 152 being the provision for anticipated loss on outstanding forward exchange contracts in the assessment year 1969-70 ?" *

Since the facts giving rise to these two reference are substantially the same, it will suffice to refer to the facts in one case. The assessee is a nationalised bank. On September 27, 1968, it filed its return of income for the assessment year 1968-69. The assessment was completed on March 17, 1972, and the income assessed was Rs. 62, 94, 890. Subsequently, the ITO on the basis of an a