- (1.) HEARD learned counsel for the parties.
(2.) THE petitioner, in this appeal challenges the order passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, in Miscellaneous Application No. 9/JP/1998 filed by the appellant-Commissioner of Income-tax for rectification of orders passed by the Income-tax Appellate Tribunal in I.T.A. No. 501/JP of 1991 dated May 2, 1997. The present appeal concerns the assessment of income of Murardan Barhat and Company, Gunga, District Barmer. In the income of the assessee-firm originally the income of Murardan Barhat and Co. (Canal Works) was also included by holding the said firm to be not a genuine firm but merely a front of the assessee-respondent and that has resulted in assessment of the firm as unregistered firm. The Income-tax Appellate Tribunal in its order referred to the fact that in the appeal filed by Murardan Barhat and Company (Canal Works) for the assessment year 1985-86, in two appeals filed by Murardan Barhat (Canal Works), Gunga, for the assessment year 1985-86, namely, I.T.A. Nos. 1532 and 1533/JP of 1990, the Appellate Tribunal has categorically held that the said firm to be genuine firm and on that basis the inclusion of income of Murardan Barhat and Co. (Canal Works) in the income of the respondent-assessee-firm was excluded for the assessment year 1985-86. It is in connection with this finding an application under Section 254(2) of the Income-tax Act, 1961, was moved by the Revenue stating that the foundation for holding the aforesaid "Canal Works" firm to be genuine has apparently been recorded on wrong premise inasmuch as in I.T.A. Nos. 1532 and 1533/JP of 1990 the firm has not been held to be genuine. The applica- tion has been rejected by the Tribunal by the impugned order, hence, this appeal. Learned counsel for the Revenue has taken us through the orders passed by the Income-tax Appellate Tribunal in I.T.A. Nos. 1532 and 1533/ JP of 1990 for the assessment year 1985-86 dated March 27, 1990, to urge that reference to the aforesaid judgment as having recorded finding of the genuineness of the firm whose income has been excluded from the asses-see-firm is apparently erroneous inasmuch as no such finding has been reached by the Tribunal in that order. Having carefully read that order, we are of the opinion that the contention of learned counsel for the Revenue is not well founded. It is apparent that while the Assessing Officer has held the said firm (Canal Works) to be not a genuine, but merely a front of the respondent-assessee, it has treated that firm as part and parcel of the assessee-firm and included the income thereof in the income of the respondent-assessee. However, as a protective measure the said firm was also assessed independently as an unregistered firm. The said appeal has arisen out of the aforesaid protective assessment and treating the firm to be unregistered one. While dealing with the submission of the assessee, the Tribunal has observed as under : "Learned counsel has placed on record the assessment/appellate orders of the lower authorities wherein the main firm has been held to be genuine. Further for the assessment year 1985-86, the Canal Works firm has been held to be genuine whereas in the case of P.C.P. works firm the matter has been set aside for fresh consideration for the assessment years 1985-86, 1986-87 and 1987-88. The learned D.R. has not been able to enlighten us as to whether the Department has preferred second appeal against these orders or not. Moreover, in neither of the cases before us the learned Commissioner of Income-tax (Appeals) has dealt with this issue and hence the ground raised does not arise out of the order appealed against. We, therefore, decline to deal with it and reject the same."
(3.) FROM the aforesaid, it is apparent that the Tribunal has stated as a fact that for the assessment year 1985-86, the lower appellate authority in separate appeal has held that Murardan Barhat and Co., Gunga, (Canal Works) to be a genuine firm. It has also further held that there is no information whether any appeal against that order either has been filed or that order has been set aside. Even today, learned counsel for the Revenue is not in a position to say the finding recorded by the appellate authority for the assessment year 1985-86 in the case of Murardan Barhat and Co. (Canal Works), Gunga, has been set aside, although he has filed appeal. Obviously, there has been a finding of the appellate authority about the genuineness of the said firm of which the Tribunal has taken note, although it has not itself recorded an independent finding. ;