TaxTMI 
TaxTMI 
1984 (5) TMI 83
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....roceedings under s. 263 of the Act. During the course of hearing before the CIT, the assessee's ld. Counsel, Shri A.K. Moitra, admitted that he was not able to reconcile the discrepancy as pointed out in the CIT's show cause notice under s. 263 of the Act. The CIT was, accordingly of the opinion that the ITO's order of assessment in respect of the asst. yr. 1976-77 was erroneous in so far as it was prejudicial to the interest of Revenue. The CIT held in his order under s. 263 that "the assessee has taken credit of Rs. 87,000 on account of opening stock in the subsequent assessment year. The value of the closing stock as shown in the trading account at Rs. 65,000, therefore appears to be patently incorrect". He, accordingly, set aside the as....
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....thumping assessment under s. 144 on a total income of Rs. 3,02,850. The ld. counsel, in this connection, filed before us a paper book containing 18 pages. He also submitted that on the question of merger itself, the assessee was entitled to the relief claimed in view of the Full Bench decision of the Madhya Pradesh High Court in the case of CIT vs. Mandsaur Electric Supply Co. Ltd. (1982) 29 CTR (MP) 324 (FB) : (1983) 140 ITR 677 (MP) (FB). In regard to the action of the CIT in setting aside the whole of the assessment order, the ld. counsel relied on a Delhi High Court decision in the case of Addl. CIT vs. J.K. D'Costa (1981) 25 CTR (Del) 224 : (1982) 133 ITR 7 (Del). 3. In reply the departmental representative pointed out that the asse....
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....dustries vs. CIT (1983) 139 ITR 1064 (MP). The departmental representative also referred to a Gujarat High Court decision reported in Karsandas Bhagwandas Patel vs. ITO (1975) 98 ITR 255 (Guj) and to a Supreme Court decision in Madurai Mills Co. Ltd. vs. State of Madras (1967) 19 STC 144 (SC). He particularly drew our attention to their Lordships observation at p. 149 of the said report, wherein it has been observed as under: "But the doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior Tribunal and the other by a superior Tribunal, passed in an appeal or revision, there is a fusion or merger of two orders irrespective of the subject-matter o....
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....3 (MP) (FB)] is a later decision than the one relied on by the assessee's ld. counsel [(1983) 140 ITR 677 (MP) (FB)]. The High Court in that case held that "under s. 263 of the IT Act, 1961, the Commissioner has no jurisdiction to set aside an order of assessment passed by the ITO when that order is the subject-matter in an appeal preferred by the assessee before the AAC." In the later Full Bench decision which has been relied on by the departmental representative, their Lordships observed that "where an appeal has been preferred by the assessee to the AAC from an order of assessment made by the ITO in respect of only some of the items covered by the ITO's order and the remaining items, forming part of the ITO's assessment order, were not a....