TMI Blog2008 (12) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 1998-99. However, the Assessing Officer vide his order under section 143(3) read with section 147 for the earlier assessment year, i.e., the assessment year 1997-98, held that the income from the transfer of aforesaid shares are taxable in the assessment year 1997-98. Further, the Assessing Officer took the view that the aforesaid transfer is an adventure in the nature of trade and the gains therefrom are receipts falling under the head Profits and gains of business or profession . Thus, he made an assessment of the same on substantive basis in the assessment year 1997-98. He also made a protective assessment of the very same income in the assessment year 1998-99. Aggrieved, the assessee carried both the matters in appeal before the Commissioner of Income-tax (Appeals). The first appellate authority, in his order for the assessment year 199798 affirmed the findings of the Assessing Officer that the transfer in question has taken place before March 31, 1997 and also upheld the finding of the Assessing Officer that the income in question was assessable only under the head Profits and gains of business or profession . When the appeal for the assessment year 1998-99 came be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground No. 3 pertains to the finding of the learned Commissioner of Income-tax (Appeals) that the income arising from the transfer of the abovementioned shares was in the nature of business income as the transaction itself was an adventure in the nature of trade. In our view, in so far as the assessment year 1998-99 is concerned, this ground is of purely academic character because the addition itself has been deleted. When the addition itself is vacated, there is hardly any purpose to determine the nature of such income, which stands deleted. We have not been informed as to whether any crossappeal has been filed by the Department. However, if any such appeal has been filed and is pending, this issue can be raised by the assessee during the course of hearing of that appeal. As far as the present appeal is concerned, we hold that the ground of appeal is purely academic and is not required to be dealt with. The Assessing Officer passed a consequential order to the order of the Tribunal in I. T. A. No. 1023/M/2003, dated September 9, 2003 for the assessment year 1998-99 in the following manner : The Income-tax Appellate Tribunal J Bench s vide order No. 1023/M/03 dated Septembe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment as per the provisions of law. 5. Each of the above grounds of appeal are independent and without prejudice to each other. We have heard S/Shri Sohrab Dastur along with Percy Pardiwalla and Nitesh Joshi on behalf of the assessee and the learned Departmental representative, Shri Daya Shankar. Shri Dastur submits that (a) the Assessing Officer has wrongly given effect to the order of the Tribunal for the assessment year 1997-98, by passing an order dated March 15, 2004 for the assessment year 1998-99 and making an addition of Rs. 13,20,49,925. There is no such direction given by the Tribunal, nor an order was passed by the Tribunal to this effect, for the impugned assessment year 1998-99 which would empower the Assessing Officer to give effect to or revive the assessment order for the assessment year 1998-99 ; (b) the issue whether the income in question, is to be assessed under the head Capital gains or assessed under the head Business income was not resolved in the appellate proceedings and that under the pretext of giving effect to the order of the Tribunal for the earlier assessment year, the Assessing Officer committed an error ; (c) as the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of shares took place only in the assessment year 1998-99 and not in the assessment year 1997-98. Vide order in M. A. No. 143/Mum/2004 arising out of I. T. A. No. 1023/Mum/2003 for the assessment year 1997-98 dated June 8, 2004, the Tribunal corrected the apparent mistake and paragraph 6 of that order was substituted as follows : The authorised representative for the assessee has contended that if the issue contained in ground Nos. 3 and 4 is decided in favour of the assessee, the issue contained in ground No. 5 will be rendered academic and so need not be adjudicated upon. As such in view of our decision rendered above on ground Nos. 3 and 4 deciding the same in favour of the assessee, we hold ground No. 5 to have been rendered academic and so dismiss the same accordingly. In other words the contention of the assessee that the income in question arising on transfer of shares is assessable under the head Capital gains has not been adjudicated upon by the Tribunal. When the assessee carried the matter before the Tribunal for the assessment year 1998-99 in I. T. A. No. 1024/Mum/2003 despite having got the relief from the Commissioner of Income-tax (Appeals), the Tribunal di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or profession and deny exemption claimed by the assessee under section 54EA of the Act and bring to tax the differential income. Thus, we agree with Shri Sohrab Dastur and cancel the order dated March 15, 2004 passed by the Assessing Officer for the assessment year 1998-99 under the title Order giving effect to the Income-tax Appellate Tribunal s order . Even otherwise, Shri Sohrab Dastur was right in pointing out that no such order could have been passed by the Tribunal directing an addition or deletion of a different assessment year in view of the judgment of the hon ble Supreme Court in the case of N. KT. Sivalingam Chettiar v. CIT [1967] 66 ITR 586 wherein it has been held as follows (headnote) : A finding or direction by an appellate authority in an order relating to the assessment of one year does not warrant the avoidance of the bar of limitation under section 34 of the Indian Income tax Act, 1922, against initiation of proceedings for assessment for another year. A finding, within the second proviso to section 34(3), must be a finding for giving relief in respect of the assessment for the year in question. A finding may only be that which was necessary for the dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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