9911796707
TMI Blog1984 (7) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... his order dt. 27th march, 1982 to entertain the appeal as also entertaining the particular grounds of appeal. 2. The return filed by the assessee showed capital gains of Rs. 28,968 this was filed on 23rd Oct., 1975. On 30th March, 1978 the market price of the shares was determined by the Departmental valuer at Rs. 1,045 and applying the provisions of s. 52(2) the ITO computed the capital gains by taking the sale price at Rs. 1,045. As per the directions of the IAC the purchase price was taken at Rs. 447 as per the Balance Sheet of the Company dt. 31st Aug., 1969. The assessee filed an appeal before the CIT(A) against this assessment on 19th July, 1978. While this appeal pending before the CIT(A), on 28th Nov., 1979 the CIT (Admn.), Passed an order u/s 263 setting aside the assessment and directing the ITO to make a fresh assessment taking the cost of the shares at 'Nil'. On 19th Jan., 1980 the assessee filed an appeal before the ITAT against the order u/s 263 of the CIT. In the meanwhile on 30th Jan., 1980 the CIT(A) dismissed the assessee's appeal pending before him for the reason that in view of the order u/s 263 of the CIT (Admn.) the appeal had become infructuous. There was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not pursued the matter before the further appellate and reference authorities, which he should have done if he was aggrieved by that order. Having missed this chance to redress his grievance, the assessee could not again present an appeal before the CIT(A). The CIT(A) could not have entertained it or decide it. The CIT(A) entertaining an appeal even against the order of the ITO dt. 20th June, 1981 allegedly giving effect to the order of the Tribunal was wrong, according to the ld. counsel. The CIT(A), therefore, should have rejected the assessee's appeal as untenable. 4. On merits it is pointed out that the computation made by the authorities was the proper computation. The shares involved being that of manageable companies the value has to be determined on the basis of established principles. The valuer of the Govt. on the basis of such principles has correctly found the value of the shares as Rs. 1,045. The almost collusive sale price fixation by the assessee, therefore has to be ignored and applying the provisions of s. 52(2) the capital gain had to be computed. The cost of the shares was 'Nil' to the assessee since he did not make any payment for his purchase. For the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) were to exercise his jurisdiction in respect of this matter under s. 263 and cancel the order of the ITO, this could be put to the worst possible misuse. Anticipating an adverse decision from the CIT(A) he could easily cancel the ITO's order and awaited jurisdiction being exercised by another CIT(A) who would pass a favourable order. Certainly the jurisdictional limits of the CIT(Adm.) and (Appeals) cannot be regarded as so fixed under the statute. Even if, therefore, he assumed that legally the CIT(Adm.) could pass an order under s. 263 when a matter is pending appeal before the CIT(A), both from the point of view of equity and justice making of such an order would be improper. If the CIT(Adm.) found that the ITO in respect of the point pending before the CIT(A) had dealt with the case in a very lenient manner, perhaps he could resort to other remedies like presenting a proper case before the CIT(A) for enhancement of the assessment. Certainly it would be improper for him to cancel the assessment taking away as it would the very foundation of the appeal pending before the CIT(A), thus making him ineffective. We are not sure whether against such a background the CIT(A) has proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1982 especially when the Department did not object to the jurisdiction was available to him. We do not think, therefore, that on this ground the jurisdiction of the CIT (Admn.) can be displaced. 8. More than the above, there are decisions to the effect that orders passed by the ITO giving effect to the appellate order could also be the basis of appeal filed to the CIT (A). Normally such an appeal can be supported where in giving effect to the appellate orders, the ITO has to make an original decision such as freshly compute the income, apply on investigation as per directions, a fresh percentage of profit. Etc. We do not however see why even otherwise a fresh liability arises to the assessee on account fo the giving effect to the order an appeal does not lie to the CIT(A). In the present case, the CIT's order under s. 263 cancelled the ITO's order and extinguished the liability to tax of the assessee. The order of the ITO giving effect to the Tribunal's order cancelling the s. 263 order of the CIT again created a fresh liability, even though all this happened in pursuance of the Tribunal's order the grievance of the assessee to an assessment order even though restored does jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee it is pointed out that he did not purchase the shares. Before 1st Jan., 1954 these shares were acquired by Shri Bhawanji A Khimji, father of the Karta of the assessee HUF On 3rd Oct., 1969 Shri Bhawanji A Khimji, threw the shares in a common hotch potch of an HUF consisting of himself and his son. A partial partition of the family on 26th Jun., 1970 brought 830 shares to the assessee-HUF. The balance of 38 share were received on a partial partition by Bhawanji A. Khimji reverted to he assessee-HUF on his death on 27th Sept., 1970. Since the shares were thrown into the hotch potch of the family prior to 1969, the provisions of sub-cl. (iv) of s. 49 (1) would not apply. This was not a case of gift, inheritance, devolution, etc. what the assessee-HUF, therefore, received was without any cost to it. Alternatively it is pointed out that at best the market value of the shares as on the date of receipt by the assessee should be recorded as his cost. Reference is made in this connection to the decisions in the case of CIT vs. Solomon (1933) 1 ITR 324 (Rang), Francis Vailabarayar vs. CIT (1960) 40 ITR 426 (Mad), CIT vs. Groz-Beckert Saboo Ltd. (1979) 8 CTR (SC) 155 : (1979) 116 ITR 125 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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