- (1.) CROSS appeals have been filed against the orders dated 10.10.2003 & 16.03.2007 passed by the Income Tax Appellate Tribunal, New Delhi in I.T.A. No.17 & 3639/Del/2003 for the assessment year 1998 -99 by the assessee as well as by the department.
(2.) ON 13.04.2007, a Co -ordinate Bench has admitted the Appeal No. 16 of 2004 on the following substantial questions of law: - "(I) Whether Ld. CIT, Meerut in the facts and circumstances of the case had jurisdiction to invoke the provision of Section -262 of I.T. Act particularly when order passed by the I.T.O. was neither erroneous, nor prejudicial interest or revenue. Therefore, Income Tax Appellate Tribunal is in error to conclude that CIT rightly acted U/S 263 and brought to tax the sum of which had been claimed as a loss by the assessee. (II) Whether in facts and circumstances of the case. Hon'ble Income Tax Appellate Tribunal in holding that C.B.D.T. Circular No. 560 dated 18.05.1990 clarifying that 'For the purpose of Section 54F, the date of transfer in such case is the date on which, capital assets is converted by the assessee into stock in trade and not the date on which, such stock in trade is sold or transfer by the assessee' . has for limited purposes only. Whether the pitch and substance and the ratio decided of Circular No. 560 dated 18.05.1990 could be held as not applicable to the provision of Section -45(2) which happen to be sister provision of the same Chapter IV, Section E, that of Capital gain."
(3.) THE brief facts of the case are that during the assessment year under consideration, the assessee was engaged in the business of manufacturing and sale of jewellery items. On 03.01.2001, the A.O. has passed an assessment order under Section -143(3). But on 21.11.2002, the C.I.T. has passed an order under Section -263 of the Act and enhanced the income of the assessee while making the addition of Rs. 2,73,879/ -. Being aggrieved, the assessee has filed an appeal before the Tribunal which was dismissed by impugned order. Still not being satisfied, the assessed has filed the present appeal. With this background, heard Sri Suyash Agarwal, learned counsel for the appellant -assessee. He submits that, the assessee has shown in the return that jewellery of 2626.95 gms. for a consideration of Rs. 8,61,640/ - was sold. But the C.I.T. found the value too low so he has taken the value as per cost index and made the said addition.;