R. BALIA, J. - (1.) THIS reference has been made by Appellate Tribunal in the proceedings arising out of assessment orders passed by the IAC in pursuance of orders made by the CIT(Admn.) under s. 263 of the IT Act, 1961.
(2.) THE question that has been referred to this Court for the asst. yrs. 1982-83 and 1983-84 arise out of ITA Nos. 268 and 269/Jp/89 is as under : "Whether on the facts and in the circumstances of the case the Tribunal erred in law in upholding the setting aside of the fresh assessment order, dt. 12th March, 1987, of the IAC (Asst.) for the asst. yrs. 1982-83 and 1983-84 ?" The facts of this case are that the respondent-assessee M/s Emery Stones Mfg. Co. is a registered firm. Originally assessments were completed for the assessment years in question on 24th Jan., 1985, by allowing depreciation on the assets by taking the cost of acquisition at the valuation at which the same has been allotted to the partners of the firm on dissolution of the firm to which they were partners. However, the original assessment orders, dt. 24th Jan., 1985 were set aside by the learned CIT vide his consolidated order dt. 16th Feb., 1987, under s. 263 as he found that depreciation on assets had been allowed on an enhanced value without invoking the provisions of Expln. 3 to s. 43(1) of the Act and directed AO to hold an enquiry into the requirement of s. 43(1) and then to pass fresh orders. Consequent to the aforesaid order of the CIT(A), the learned IAC reframed assessments on 12th March, 1987. Against the said assessment orders, the assessee preferred appeals before the learned CIT(A), Jodhpur. In the meanwhile, the assessee approached the Tribunal against the orders passed by the CIT (Admn.) under s. 263 which was set aside by the Tribunal by consolidated order dt. 24th Nov., 1988, in ITA 330 and 331/Jp/87 and the order of the CIT (Admn.) under s. 263 was set aside. Following the aforesaid decision of the Tribunal, the CIT (Admn.) has allowed the appeal against the order of the AO inasmuch as the foundation for appeal ceased and that order of the CIT(A) has been confirmed by the Tribunal, out of which the present reference has arisen. It has been pointed out by the learned counsel for the Revenue that the order under s. 263 of the CIt has been restored in pursuance of opinion expressed by this Court on an reference having been made about the validity of the Tribunal's orders of CIt setting aside the order and remanding the case back to the AO for deciding the issue afresh by keeping in view the provisions of s. 43(1). In view thereof, now the only foundation on which the order under reference has been made, has ceased to exist. The judgment of the High Court in the aforesaid reference No. 1 of 1992 is reported as CIt vs. Emery Stone Mfg. Co. (1995) 126 CTR (Raj) 345 : (1995) 213 ItR 843 (Raj) : TC 57R.228 as, the sole ground on which the appeal of the Revenue has been rejected by the Tribunal has been stated to be thus. "When the CIt(A) order was in conformity with the order of the Tribunal in ItA Nos. 330 and 331/Jp/87 (supra) in our view there is no justification to interfere with the view taken by the CIt (A)." In this view of the matter the merit of the finding reached by the AO on anvil of s. 43(1) Expln. 3 has not been examined either by the CIt(A) or the Tribunal. In view of the fact that the order of Tribunal in ItA Nos. 330 and 331/Jp/87 no more holds the field, the question referred to this Court has to be answered in negative and it will be for the Tribunal to rehear the appeal on merits in accordance with law as envisaged under s. 260 and pass fresh orders. No orders as to costs.;