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TMI Blog2008 (3) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year 1989-90. 2. The assessee-appellant has claimed that the following questions of law would arise for consideration of this court : "(i) Whether, under the facts and circumstances of the case, the Tribunal is justified in taxing amount received in pursuance of the insurance claim giving two divergent treatments as a capital receipt and as a revenue receipt ? (ii) Whether, under the facts and circumstances of the case, the Tribunal is justified in overlooking the doctrine of merger being the substance of the controversy on the interpretation of order in C. W. P. No. 4637 of 1996 and I. T. A. No. 122 of 2002 by this court ? (iii) Whether the Tribunal is justified in applying the provisions of section 45(1A) retrospectively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany for the loss due to fire. The claim to the extent of Rs. 15,34,177 was received. The assessee had also sold scrap of the machinery for a sum of Rs. 13,04,995. The written down value (WDV) of the machinery was Rs. 1,42,042, which by adding the machinery of previous year of Rs. 20,06,705,. came to the total of Rs. 21,48,747. The short-term capital gain was calculated by the assessee at Rs. 6,90,425 after deducting the aforementioned amount from the insurance claim and scrap value received from the sale of the same, which was set aside by the Commissioner of Income-tax in exercise of power under section 263 of the Act, vide order dated March 23, 1993. 4. During the course of assessment proceedings under section 143(3) of the Act, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessment order made under section 143(3) of the Act on February 28, 1995, was set aside, vide order dated October 4, 1996, with a direction to the Assessing Officer to examine the issue in the light of the provisions of section 50 of the Act. 6. The Revenue approached the Tribunal by raising the issue that the appeal before the Commissioner of Income-tax (Appeals) was against the order under section 154 of the Act and, therefore, he had no power to set aside the assessment framed under section 143(3) of the Act, as no appeal was filed by the assessee against that order. The Revenue raised various other issues. The assessee also raised the principal issue that the Assessing Officer having ignored the legal provisions of section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax (Appeals) did not pass any speaking order on the issue but has issued direction to the Assessing Officer to consider the claim of the assessee under section 50 of the Act afresh as if he was deciding the appeal against the assessment order dated February 28, 1995, passed under section 143(3) read with section 263 of the Act. The Tribunal placed reliance on a judgment of the hon'ble the Supreme Court in the case of T. S. Balaram v. Volkart Brothers [1971] 82 ITR 50 ; AIR 1971 SC 2204, and went on to observe as under: "In our considered view, the powers of the Assessing Officer under section 154 are limited to rectification of mistake apparent from record. The mistake must be obvious and patent and not something which can be establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as set aside and the order of the Assessing Officer under section 154 of the Act was restored." 7. The aforementioned facts and circumstances show that only the following question of law would arise for determination: "Whether the order dated February 28, 1995, passed by the Assessing Officer under section 143(3) read with section 263 of the Income-tax Act, 1961, which has attained finality, could be reversed while hearing appeal against the order dated February 2, 1996, passed by the Assessing Officer under section 154 of the Act." 8. After hearing learned counsel for the parties we are of the considered view that the order passed by the Tribunal is in conformity with law. The order dated February 28, 1995, passed by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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