Dismissing the appeal of the revenue the Court held that the  assessee had not advanced the funds to the entities interest-free. The Commissioner had proceeded on surmises that the investment in shares was out of the borrowed funds of the assessee whereas it was not so. As regards valuation of stock

the assessee had explained the difference in the value of stocks stating that 91 per cent. of its stocks were comprised of goods meant for export whereas 80 per cent. of the sales during the year were for the domestic market. Inasmuch as the export sales did not have an element of excise duty, the prices in the domestic market were higher. Further the stocks were comprised of various grades and therefore the prices could not be worked out by merely dividing the total quantity by the sale value.  As regards commission payment to non -resident the Tribunal had found that the Assessing Officer had obtained a written explanation on the non-reduction of tax deducted at source on commission payment to non-resident parties and had held that there was nothing unusual about the commission payment. Importantly, this was not a case where the Assessing Officer had not made any inquiry. The order of the Tribunal  affirmed .( AY.2000-01)