- (1.) The Income Tax Appellate tribunal has referred under Section 257 of the Income Tax Act, 1961 the following question of law for decision of this court, namely: "Whether on the facts and in the circumstances of the case, the order of assessment passed by the ITO under Section 143 (3 read with Section 144-B on 31/7/1978 had merged with that of the Commissioner (Appeals) dated 15/12/1979 in respect of the three items in dispute so as to exclude the jurisdiction of the Commissioner of Income Tax under section 263 -
(2.) The assessee is a company. The relevant assessment year is 1975-76 ending on 31/12/1974. The assessment was completed under Section 143 (3 read with Section 144-B on 31/3/1978 in which the net business loss was computed at Rs. 3,61,086. 00 and the income under the head "capital gains" at rs 38,874. The Income Tax Officer had made certain additions and disallowances while computing the loss and income as above and had also accepted, inter alia, the following three claims: (I) Deduction of a sum of Rs. 23,82,621. 00 by way of provision for gratuity; (Ii) Depreciation on Rs. 4,21,000. 00 which was paid by the assessee to united Textile Industries as consideration for transfer of installed property of 17,480 spindles and 400 looms of Old Manek Chowk Mills; (Iii) Loss on account of difference in exchange rate which was referable to the purchase of machinery etc. as revenue expenditure. For the purposes of the present matter, it is only these three items of, claim which are relevant.
(3.) In the appeals filed by the assessee, the items in respect of which the decision was in its favour were not the subject-matter of the appeals. In respect of these three items the Commissioner exercised his power under section 263 of the Income Tax Act. The above question arises in this context.;