TMI Blog2005 (11) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the AO to give allowance for the same for working out the total investment and also directed that for this purpose peak credit should be worked out and allowance must be given for the past savings made by the assessee. For working out the interest income, CIT(A) directed that the rate of 24 per cent should be applied and the business expenditure for earning such income should be deducted for working out the net income from interest. Thus direction was given that the interest income should be worked out only after working out the total investment. These directions are not the ones which can be followed by the AO without calling the assessee and without appreciating the various evidences/documents which are required for working out instalments received by the assessee, peak credit, computation of total investment, working out the expenditure incurred for by the AO by applying its mind. This will also tantamount to restoring the issue to the file of the AO to be decided afresh after giving the hearing to the party and following the direction of the CIT(A). This also implies that the assessment relating to these issues stand set aside and to be decided afresh in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest income from moneylending average rate of 24 per cent should be applied and the business expenditure for earning such income should be deducted to work out the net income from interest. The AO should therefore, work out the interest income only after the total investment is worked out in the manner given above. 3. In respect of ground No.9 taken by the assessee, which relates to the estimation of income from pawning business, the CIT(A) held as under in para 6.1 of its order: From the above it is observed that during the search operation the locker sealed was not opened and no evidence for pawning business was collected by the Department. Further it is stated that the business was being done by his nephew, Shri Beni Ram and whatsoever jewellery was available taken over by him because his nephew decided not to live with the appellant. From the assessment order it is also noticed that the statement of Shri Beni Ram was not recorded during the course of hearing of the case to come to the conclusion that the pawning business was being done by the appellant. In view of this the AO is directed to make further enquiry to establish that the appellant was doing pawning business an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lending business as well as to ascertain whether the pawning business belonged to the assessee. These issues arise out of ground Nos. 7, 8 and 9 taken by the assessee before the CIT(A) against the original assessment framed on 21st March, 1988. This case does not fall under s. 153(3). The order was not passed in consequence of any finding or direction. These orders were passed as these issues were got set aside and went back to the file of AO. The word set aside has been defined in Webster's Dictionary to mean, To put to one side, discard, to set apart for a purpose, overrule. The CIT(A) has set apart the decision of the AO on these two points, i.e. for the computation of unexplained investment in the moneylending business, the AO has to enquire whether the assessee carried on the pawning business or not. Merely that the words 'set aside' have not been mentioned, does not mean that these issues were not set aside. Reliance was also placed on the Commentary by Pithisaria and Chaturvedi at p. 3708 Vol. 3, IV Edn., in which it is mentioned: The period of limitation in s. 153(2A) is attracted where fresh assessment is being made for a particular year in pursuance of finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation has been provided under the law, it cannot be extended by anyone and for this reliance has been placed on the decision of Jain Cloth House again. In respect of the judgments relied upon by the CIT(A), it was submitted that these judgments cited by the CIT(A) relate to the period when s. 153(2A) was not brought in the statute. These judgments are: (a) Khalsa Provisions vs. CIT (1981) 25 CTR (Del) 248 : (1982) 135 ITR 817 (Del) (b) CIT vs. Chitranjali (1986) 50 CTR (Cal) 226 : (1986) 159 ITR 801 (Cal) (c) R.K. Sawhney, Executor of the Estate of Late R.B. Nathuram vs. CIT (1987) 63 CTR (Del) 45 : (1987) 166 ITR 128 (Del) (d) Hope (India) Ltd. vs. CIT (1993) 203 ITR 118 (Cal) 9. The learned Authorised Representative carried us to the order of the CIT(A), by which the ground Nos. 7, 8 9 of the assessee were disposed of, the copy of such order is appearing at pp. 48 and 50 of the paper book and it was vehemently submitted that since the AO has to take a decision on the basis of appreciation of the evidence or the documents as submitted by the assessee or collected by the Revenue, the assessment in respect of these two issues has been set aside and restored to the file of the AO. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t where the order under s. 250 or s. 254 is received by the Chief CIT or CIT or, as the case may be, the order under s. 263 or s. 264 is passed by the Chief CIT or CIT, on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such an order of fresh assessment may be made at any time upto the 31st day of March, 2002. (3) The provisions of sub-ss. (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, subject to the provisions of sub-s. (2A) be completed at any time-............. (ii) Where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under ss. 250, 254, 260, 262, 263 or 264 or in an order of any Court in a proceedings otherwise than by way of appeal or reference under this Act; 12. From the reading of the aforesaid provisions it is clear that the assessment is to be made when it is set aside within 2 years from the end of the financial year in which the order setting aside was received by the CIT or Chief CIT. But in case assessment is made to give effect to any finding or direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after giving the hearing to the party and following the direction of the CIT(A). This also implies that the assessment relating to these issues stand set aside and to be decided afresh in accordance with the directions of the CIT(A). 13. The various case laws cited before us are being dealt with as under: a. CIT vs. Kamla Devi: In this case the assessments completed by the AO for the asst. yrs. 1971-72 and 1972-73 were set aside under s. 263 by the CIT vide order dt. 27th Dec., 1973. The fresh assessments were completed by AO on 26th March, 1977. On reference, Hon'ble High Court held that the Tribunal was justified in holding that the assessments were barred by limitation. This case will not help the assessee as in this case the assessments were set aside is not in dispute. b. Manik Chand Burman vs. ITO : The AO issued notices dt. 11th Nov., 1976, 18th Jan., 1983 and 28th Jan., 1983 calling upon the assessee to furnish information to enable him to complete the assessment pursuant to the order dt. 30th Dec., 1957 setting aside the assessment order for the asst. yr. 1949-50. The assessee filed writ before Hon'ble High Court for quashing the notices. Hon'ble High Court he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he asset to be done by the AO in compliance with the order of the CIT(A) setting aside the assessment. The period of limitation was to be computed from the date of the order of the CIT(A) and if that be so then the reassessment for the asst. yrs. 1964-65 to 1974-75 was barred by limitation. The case is applicable to the extent that the Revenue has not gone into appeal before the Tribunal against the finding of the CIT(A) relating to the ground Nos. 7, 8 and 9 and accordingly the limitation if applicable will apply from the date when the order of the CIT(A) was received by the Chief CIT or CIT. d. Gulab Chand Motilal vs. CIT : In this case the AO made addition for the asst. yr. 1975-76. CIT(A) held that income related to the asst. yrs. 1964-65 to 1974-75. Reassessment after issuing notices under s. 147 were competed on 10th Sept., 1981. The assessee contended that the reassessments made were barred by time. When the matter travelled to High Court. Hon'ble High Court held that in interpreting a legal fiction, the Court, after ascertaining the purpose for which the fiction is created, has to assume all those facts and consequences, which are incidental or inevitable corollaries to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e penalty under s. 271(1)(a). In this case it was held that penalty under s. 271(1)(a) was tax based in the relevant period. The assessed tax has to be determined with reference to assessment order. If part of assessment has been set aside then assessment has to be completed first and then the question of levy of penalty examined with reference to assessed tax. There has to be tax and complete assessment. This case in our opinion is not applicable to the facts of the case before us. It does not lay down the proposition that the limitation under s. 153(2A) will apply even if the assessment has been set aside in respect of some of the issues. h. Pullpati Subbarao Co. vs. AAC (relied by Departmental Representative): In this case, the AO treated the assessee as an unregistered firm for asst. yr. 1952-53. In appeal AAC set aside the assessment and directed the ITO to receive a duplicate application for registration from the petitioner and to deal with it according to law. The ITO issued a memo to the petitioner to produce its account books. The assessee objected that the assessment order passed by AAC did not envisage a de novo assessment and the only matter which ITO had to consider wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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