P.P.S. Janarthana Raja, J.

This appeal is filed under Section 260A of the Income Tax Act, 1961 by the Revenue, against the order of the Income Tax Appellate Tribunal, Bench "A", Chennai in I.T.A. No.2966/Mds/04 dated 01.09.2006 raising the following substantial question of law:-

Whether on the facts and circumstances of the case, the Tribunal was right in holding that the assessee was entitled to value its opening stock in one way and the closing stock in another, during the relevant year when Accounting Standard 2 had come into effect in the earlier year itself?

2. The facts leading to the above substantial question of law are as under:

The assessee is a Company. The relevant assessment year is 2001-2002 and the corresponding accounting year ended on 31.03.2001. The original Return of income was filed on 30.10.2001 declaring total income at Rs.1,27,00,922/-. Later, the assessee filed revised Return declaring total income at Rs.1,19,74,004/-on 211. 2001. The Assessing Officer noted that the assessee made changes in the method of valuation of stock. The Assessing Officer completed the assessment under Section 143(3) of the Income-tax Act ("Act" in short). While completing